Financial Fragility and Corporate Bond Funding of SMEs: An Analysis of the Italian Case

Entrepreneurship - Contemporary Issues ◽

10.5772/intechopen.93701 ◽

2021 ◽

Author(s):

Emanuele Rossi ◽

Simone Boccaletti

Keyword(s):

Control Sample ◽

Bond Market ◽

Corporate Bond ◽

Financial Fragility ◽

Financial Policy ◽

Bank Debt ◽

Firm Level ◽

Growth Firms ◽

Key Factor ◽

Bond Issuers

The chapter analyzes the financial policy of corporate bond issuers in the new Italian junior bond market specifically dedicated to unlisted firms and SMEs, using a proprietary firm-level dataset on 127 first-time mini-bond issuers across 2013–2017 years jointly with a control sample of around 5200 Italian private firms that have not issued corporate bonds across the same years. Since SME access to the debt capital market is largely considered a valuable source of debt funding diversification, especially for growth firms with a prominent exposure on bank debt, we test using OLS regressions whether bond issuers are able to reduce their financial vulnerability in comparison with similar nonissuers firms. The aim is to assess the extent to which the financial choices of SMEs regarding nonequity external funding can become a key factor in facing real and financial shocks like those triggered by the current pandemic Covid-19 outbreak. Our findings suggest that the access to the junior bond market is beneficial for the Italian unlisted companies in terms of a pronounced improvement in our financial fragility indicators.

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Do Bond Issuers Shop for Favorable Credit Ratings?

Management Science ◽

10.1287/mnsc.2019.3440 ◽

2020 ◽

Vol 66 (12) ◽

pp. 5944-5968 ◽

Cited By ~ 1

Author(s):

Mathias Kronlund

Keyword(s):

Credit Ratings ◽

Theoretical Models ◽

Bond Market ◽

Corporate Bond ◽

Corporate Bond Market ◽

Bond Issuers ◽

Biased Ratings

This paper provides evidence of ratings shopping in the corporate bond market. By estimating systematic differences in agencies’ biases about any given firm’s bonds, I show that new bonds are more likely to be rated by agencies that are positively biased toward the firm—a pattern that is strongest among bonds that have only one rating. The paper also shows that issuers often delay less favorable ratings until after a bond is sold. Consistent with theoretical models of ratings shopping, these effects are strongest among more complex bonds that are more difficult to rate. Bonds with upward-biased ratings are more likely to be downgraded and default, but investors account for this bias and demand higher yields when buying these bonds. This paper was accepted by Gustavo Manso, finance.

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Corporate bonds as a way of financing companies in the Republic of Serbia

Ekonomika ◽

10.5937/ekonomika2104091r ◽

2021 ◽

Vol 67 (4) ◽

pp. 91-102

Author(s):

Ljiljana Rajnović ◽

Jonel Subić

Keyword(s):

Stock Exchange ◽

Corporate Bonds ◽

Good Alternative ◽

Bond Market ◽

Corporate Bond ◽

Corporate Bond Market ◽

Sustainable Operation ◽

Bond Issuers ◽

The Republic

The security of sources of financing is of undoubted importance for the continuous and sustainable operation of economic entities, which is a long-term interest of persons interested in the operation of economic entities. In the structure of possible sources of financing of economic entities, corporate bonds are of great importance everywhere in the world, and their application in the Republic of Serbia could bring a great contribution to the domestic economy. Corporate bonds are debt obligations issued by corporation to debt refinancing, improvements, expansions or acquisitions. The bondholders are the issuer's creditors and for the money invested in the company, they expect earnings. The main goal of this paper is to consider the conditions and importance of issuing corporate bonds by medium and large companies in Serbia and the advantage over other sources of financing. Based on the obtained research results, it can be concluded that the issuance of bonds is a good alternative to other sources of financing the company's operations, but the corporate bond market in Serbia is in the development phase. Bond issuers with listing on the regulated market of the Belgrade Stock Exchange include, in addition to the state, only certain commercial banks and international financial organizations.

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Corporate Bond Market in Poland—Prospects for Development

Journal of Risk and Financial Management ◽

10.3390/jrfm13120306 ◽

2020 ◽

Vol 13 (12) ◽

pp. 306

Author(s):

Jakub Kubiczek

Keyword(s):

Corporate Bonds ◽

Bond Market ◽

Corporate Bond ◽

Annual Growth ◽

Market Development ◽

Supply Side ◽

Upward Trend ◽

Corporate Bond Market ◽

Bond Issuers

The Polish corporate bond market does not have a history as long as the American one, however, it is characterized by stable annual growth. The growth of the market is related to the growth of its liquidity and is determined by a number of entities, both on the demand and the supply side. The aim of the study was to present the structure of the Catalyst market and bond trading in Poland. The study also discusses the market’s development and identifies the factors that determine this development. Based on reports concerning trading on the Catalyst market, a huge growth was noticed in the 10 years since the market’s establishment. Forecasts indicate that the growth will continue. The outbreak of the SARS-CoV-2 pandemic will cause the market development to be slower than the model’s forecast, although the data for the first nine months of 2020 suggest that the upward trend will be maintained. Moreover, for the market to continue to thrive, a rating must be compulsory for corporate bond issuers. A comparison of the ratings of individual issuers enables investors to analyze the risk and profitability of corporate bonds in an easier way.

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PRACTICES OF DEVELOPMENT AND IMPLEMENTATION STRATEGY FINANCIAL POLICY OF HIGHER EDUCATION INNOVATION OF UKRAINE

WORLD OF FINANCE ◽

10.35774/sf2017.02.072 ◽

2017 ◽

pp. 72-83

Author(s):

Vitaliy MARTYNIUK

Keyword(s):

Higher Education ◽

Development Strategy ◽

State Regulation ◽

The State ◽

Direct Result ◽

Financial Policy ◽

Innovative Development ◽

Efficient System ◽

Social Standards ◽

Key Factor

Introduction. Article reviews the current state and key aspects of financial policy in higher education and it’s innovative development in Ukraine. Through education institutions achieved increase of social standards, needs and increase welfare, increase the competitiveness of the state as a whole. Purpose. The purpose of this paper is to determine the characteristics of the development strategy of financial policy of innovative development of higher education and finding ways to improve its implementation. Results. The article deals with the importance of an innovative approach to the development of financial strategy in higher education. The ways to improve the effectiveness of the financial policy of innovative development of higher education are defined. Today an important form of state regulation of the economy is macroeconomic planning and forecasting. Conclusion. Innovative development of higher education is the foundation of economic growth of the economy and improvement of social standards. The financial policy of the state in this area is aimed, ultimately, to ensure the welfare of all members of society. Achieving high rates of innovation in the field of higher education facilities by building efficient system of economic mechanisms of financing. Important direct result of providing innovative educational services not only to order the state or the employer, but also on the personal needs of citizens in their development. The level of education is a key factor the ability of the workforce to adapt to new conditions, increase overall efficiency, etc.

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