Corporate Finance Under Low Interest Rates: Evidence from Hong Kong
This paper examines the impact of the dramatic reduction in interest rates by the Federal Reserve on Hong Kong. Using a panel of several hundred firms in Hong Kong we find that firms increase all types of debt, but shift from short-term to long-term debt as rates fall. This can be attributed in part to a supplyside effect as the benign monetary policy environment has improved creditworthiness. The most noticable result from our analysis is the high level of bank dependence among Hong Kong firms and the continued dependence on bank finance even when interest rates fall. Potentially this may reveal that Hong Kong lacks the benefits of a deep domestic bond market.
Year of publication: |
2005-11
|
---|---|
Authors: | Mizen, Paul ; Yalcin, Cihan |
Institutions: | Hong Kong Institute for Monetary Research (HKIMR), Government of Hong Kong |
Saved in:
freely available
Saved in favorites
Similar items by person
-
An Open Economy Model of the Credit Channel Applied to Four Asian Economies
Bougheas, Spiros, (2007)
-
What Effect Has Bond Market Development in Emerging Asia Had on the Issuance of Corporate Bonds?
Mizen, Paul, (2010)
-
Guariglia, Alessandra, (2012)
- More ...