A Study of the Determinants of Large-Scale Financing Decision: The Case of the Pacific Alliance Countries
DOI:
https://doi.org/10.17230/ecos.2021.52.5Keywords:
Bonds, Syndicated Loan, Emerging Markets, Pacific AllianceAbstract
There are two forms of large-scale funding in the markets: bond issuance and syndicated loans. The latter have shown significant growth in recent times. Using data from Bloomberg, the determinants to decide whether getting funding from one alternative or another among 54 companies of the Pacific Alliance were investigated. Using Panel Data Models with ordinary least squares and a
Probit model with random effects, it was found that factors such as the amount of credit, the sector, profitability, and the size of the firms play a significant role in the decision to get syndicated loans. Knowing the determinants to make a decision on funding is important since it allows the firm’s management to know which aspects they should consider when deciding which alternative they’d choose to finance themselves and their implications. This study constitutes a first approximation to the analysis of the syndicated loan market in the Latin America emerging countries.
Downloads
References
Adamuz, María de las Mercedes y Hernández, Janko y Moreno Treviño, Jorge O. (2015) Estructura de deuda corporativa y el mercado de créditos sindicados en México : Serie de documentos de trabajo 2015-02. Documento de trabajo. Fundación de Estudios Financieros.
Alexandre, H., Bouaiss, K., & Refait-Alexandre, C. (2014). Banking Relationships and Syndicated Loans during the 2008 Financial Crisis. Journal of Financial Services Research, 46(1), 99-113. https://doi.org/10.1007/s10693-013-0172-4
Alianza del Pacífico (2019). Figures of the Pacific Alliance. https://alianzapacifico.net/en/
Altunbaş, Y., Kara, A., & Marques-Ibanez, D. (2010). Large Debt Financing: Syndicated Loans versus Corporate Bonds. European Journal of Finance, 16(5), 437-458. https://doi.org/10.1080/13518470903314394
Ang, J. S., Cole, R. A., & Lin, J. W. (2000). Agency Costs and Ownership Structure. Journal of Finance, 55, 81-106. http://dx.doi.org/10.1111/0022-1082.00201
Beck, N. & Katz, J. N. (1995). What to do (and not to do) with Time Series Cross Section Data. The American Political Science Review, 89(3), 634-647.
Caporale, G. M., Lodh, S., & Nandy, M. (2018). How has the global financial crisis affected syndicated loan terms in emerging markets? Evidence from China. International Journal of Finance and Economics, 23(4), 478-491. https://doi.org/10.1002/ijfe.1633
Dang, C., Li, Z., & Yang, C. (2018). Measuring firm size in empirical corporate finance. Journal of Banking and Finance, 86, 159-176. https://doi.org/10.1016/j.jbankfin.2017.09.006
De las Mercedes Adamuz, M. & Hernández Cortés, J. (2014). Endogenous screening and the formation of loan syndicates. International Review of Economics and Finance, 37, 290-307. https://doi.org/10.1016/j.iref.2014.12.002
Diario La República (2014). La Alianza del Pacífico es la octava potencia económica a nivel mundial. https://www.larepublica.co/economia/la-alianza-del-pacifico-es-la-octava-potencia-economica-a-nivelmundial-2136046
Eichengreen, B., & Mody, A. (2000). Lending booms, reserves and the sustainability of short-term debt: inferences from the pricing of syndicated bank loans. Journal of Development Economics, 63(1), 5-44.
Fleming, G., Heaney, R., & Mccosker, R. (2005). Agency costs and ownership structure in Australia. Pacific-Basin Finance Journal, 13(1), 29-52. https://doi.org/10.1016/j.pacfin.2004.04.001
Gill, A. & Shah, C. (2012). Determinants of corporate cash holdings: Evidence from Canada. International Journal of Economics and Finance, 4(1), 70-79. http://dx.doi.org/10.5539/ijef.v4n1p70
Godlewski, C. J. & Weill, L. (2008). Syndicated loans in emerging markets. Emerging Markets Review, 9(3),206-219. https://doi.org/10.1016/j.ememar.2008.04.001
Gujarati, D. & Porter, D. (2010). Econometría (5.a ed.). McGrawHill. México DF
Hale, G.( 2007). Bonds or Loans? The Effect of Macroeconomic Fundamentals. Economic Journal, vol. 117, issue 516, 196-215.
Iavorskyi, M. (2013). The impact of capital structure on firm performance: evidence from Ukraine (Tesis de doctorado). Kyiv School of Economics. http://www.kse.org.ua/download.php?downloadid=306
Martín, J. L. & Téllez, C. (2011). Créditos sindicados y emisiones internacionales de bonos. Revista de Contabilidad y Dirección, 12, 73-94. https://accid.org/wp-content/uploads/2018/10/Creditos_sindicados_y_emisiones_internacionales_de_bonos.pdf
Maskara, P. K. & Millineaux, D. J. (2011). Small Firm Capital Structure and the Syndicated Loan Market. Journal of Financial Services Research, 39, 55-70. https://doi.org/10.1007/s10693-010-0086-3
Merino, G. E. (2017). Proyectos estratégicos e integración regional en América Latina. El surgimiento de la Alianza del Pacífico, el fortalecimiento del regionalismo abierto y el retroceso del regionalismo autónomo. Relaciones Internacionales, 26(52), 008. https://doi.org/10.24215/23142766e008
Narodowski, P. & Merino, G. (2015). La agudización de las tensiones globales. Análisis de la crisis del orden unipolar y los conflictos geoestratégicos desde una perspectiva centro-periferia. Estudios Socioterritoriales, 18, 81-99.
Peyrani, J. & Geffner, M. (2013). Dos modelos en debate: MERCOSUR ampliado y la Alianza del Pacífico. Compatibilidades y diergencias. Buenos Aires: Fundación Friedrich Ebert. https://library.fes.de/pdffiles/bueros/argentinien/10753.pdf
Downloads
Published
Versions
- 2022-12-06 (2)
- 2022-12-06 (1)
Issue
Section
License
Copyright (c) 2022 Judith Cecilia Vergara Garavito, Sandra Patricia Henao Rodríguez, Mario Alberto Mosquera Valencia
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
