We provide robust empirical evidence that uncovers the reason for the observed closer relationship between the bond … market versus the equity market and the macroeconomy. Our results indicate that the tight bond market-macroeconomy link is …

We examine the effect of the bond capital supply uncertainty of institutional investors (e.g., mutual bond funds and … firm's bond investor base — measured as (i) the average portfolio turnover or (ii) the average flow volatility of investors … companies — has a negative and significant effect on the leverage of the firm. The supply uncertainty of the firm's bond …