انتخاب منبع تامین مالی در بازارهای بین المللی بدهی

This paper examines incremental debt financing decisions of large Asian firms over the period 1989–1998. We find that flotation costs, agency costs, and renegotiation and liquidation risk affect the choice of debt type and that firms in countries with well developed private bond markets have a higher probability of accessing international bond markets. Significant differences exist between the determinants of choice of debt type across Japanese and non-Japanese firms that cannot be explained by keiretsu associations. Moreover, there is no significant difference in the determinants of financing source for Japanese firms across independent firms, horizontal keiretsus, and vertical keiretsus. Journal of Economic Literature Classification Number: F39, G15, G21, G32.

This paper has benefited from comments by Steve Dennis, Warren Hogan, Mike Skully, Kris Webster, participants at research workshops at Monash University and the University of Technology,Sydney, and at the 2000 FMA European Meeting, the 12th Annual PACAP/FMA Meeting, and the2001 JFI Symposium on Corporate Finance with Blurring Boundaries between Banks and Financial Markets, and an Associate Editor and two anonymous referees. The authors also gratefully acknowledge the research support provided by both the small and large grant schemes of the Australian Research Council.of a firm’s debt. The focus in these more recent studies has been on how firms choose between public and private debt sources,2 and contingent on that choice,the determination of debt contract terms including maturity, secured status, and pricing of the debt.3 They explore how asymmetric information, agency costs,taxes, credit quality, reputation, and strength of the borrower/lender relationship affect these decisions.Outside the United States there have been few studies of the choice of financing source, defined here as the choice between public and private (intermediated) debt.Consequently the primary objective of this paper is to extend the U.S. literature to consider the choice of financing source by Asian firms in international debt markets. It seeks answers to the following important questions. Are the determinants of financing source in international debt markets similar to those observed in studies of domestic debt markets? Do cross-country differences in government corruption, in legal rules affecting the enforcement of debt contracts, in the development of financial markets and institutions, and/or in corporate governance mechanisms, affect the choice? Is the behaviour of Japanese firms in selecting debt type different from that of other Asian firms? Does affiliation with a horizontal or vertical keiretsu affect the choice of financing source by Japanese firms?Three main groups of hypotheses explaining the choice between public and private (intermediated) debt have been suggested. First, flotation costs hypotheses draw on the observation that flotation costs of public debt issues are high and have a large fixed cost component.With potential economies of scale, firms that issue in large quantities are likely to find public debt financing relatively more attractive (see Blackwell and Kidwell, 1988; and Easterwood and Kadapakkam, 1991). Second,agency cost hypotheses drawon the distinction that private debt involves the lender monitoring the firm’s activities, while monitoring is not available with public issues. Only firms with high credit quality, and thus who do not need to be closely monitored, are able to use public debt financing which is then available at a lower interest rate. Firms exposed to greater incentive problems, in the form of asset substitution and underinvestment, receive more value from monitoring and will use private debt despite higher interest rates (see Diamond, 1984, 1989, 1991; and Rajan, 1992). Finally, the liquidation and renegotiation hypotheses recognise that,in the event of financial distress, private debt agreements are easier to renegotiate and provide for more flexible liquidation than public debt (see Berlin and Loeys,1988; Chemmanur and Fulghieri, 1994; and Detragiache, 1994).A number of recent empirical studies have found support for these hypotheses.With the exception of two Japanese studies (see Hoshi et al. 1992; and Anderson and Makhija 1999), the data relate to that of U.S. firms. Moreover the studies generally focus on balance sheet ratios of private debt (or public debt) to total debt.4 A difficulty with using balance sheet measures of debt type is that it is often difficult to distinguish public from private debt, and bank debt from private nonbank debt.5 Moreover, balance sheet data often involve the averaging of financing decisions over time and this may produce misleading indications of a firm’s debt choice. On the other hand, studies based on incremental financing decisions of afirm are better equipped to deal with debt choice issues as identification of debt type is readily achieved and there is no averaging of financing decisions over time.There has recently developed an extensive literature on the effects of legal rules,and their enforcement, on economic growth and financial development. Laportaet al. (1997, 1998) examine the importance of national legal origin on creditor and shareholder rights and on external finance, while Levine (1999) and Levine et al. (2000) extend this research to consider the importance of legal systems for economic growth. An important conclusion is that countries with poor legal rules and law enforcement have narrower debt and equity markets (see Laportaet al., 1997), and that a well defined and enforced legal system facilitates greater financial intermediation and therefore economic growth (see Levine et al., 2000).Moreover, Rajan and Zingales (1998) argue that relationship-based systems, as in Japan with its main bank system, work well when contracts are poorly enforced but can severely mis-allocate capital.Another strand of the literature considers the effect of alternative forms of ownership and corporate governance in Asian firms on financial behavior. Claessenset al. (1999) document the separation of ownership and control in East Asian corporations,while the effect of bank equity ownership within horizontal (financial)keiretsus in Japan on the financial performance, corporate control, and value of firms is examined in Weinstein and Yafeh (1998), Morck and Nakamura (1999),and Morck et al. (2000). These studies suggest that main bank client firms do not perform better than independent firms, that firm value and equity ownership by main banks are inversely related, and that the keiretsu facilitate the entrenchment of management. However, there has been relatively little research into the effects of keiretsu membership on the choice of debt instruments and the design of debt contracts. Cai et al. (1999) find that the maturity of Japanese domestic straight bond issues from 1980 to 1993 is directly related to the ratio of the firm’s bank debt to total debt and that this relationship is stronger for independent firms than keiretsu-affiliated firms. However, when Anderson and Makhija (1999) examine the determinants of the ratio of bank to total debt of Japanese firms in 1990, they find it is directly related to the firm’s growth opportunities but that this relationship is not influenced by keiretsu-affiliation.Thus this study makes three important contributions to the literature on the choice of debt type. First it extends the empirical analysis beyond the United States and Japan by examining the debt choice of firms located in ten countries—China, Hong Kong, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, and Thailand.6 Second, we use data on incremental funding decisions of the firms as collected by IFR Securities Data in Hong Kong and marketed as IFR OmniBase. It provides comprehensive information relating to the contract terms on each public debt issue and/or bank loan. Incremental data allow us to narrow the choice between public issues and bank financing to contracts likely to perform similar functions.7 Hence we restrict the analysis to the choice between making a public issue of fixed term debt and obtaining a syndicated term loan.Third, whereas prior studies have focused on debt choice within domestic loan and bond markets, we examine the choice within international debt markets. In countries with relatively thin or highly regulated domestic debt markets, large firms rely on international markets for their medium-to-long-term debt. As in domestic markets, the firms may choose between private debt (a syndicated term loan) or a market-traded bond (a Eurobond or foreign bond issue).In the first of two models that we estimate, Eurobonds are considered identical to foreign bonds. However, because Eurobonds have some characteristics that suggest a limited monitoring role of investors, in the second model we assume that Eurobonds lie between the intensive monitoring of bank loans and nonmonitored public issues. We find that the choice of financing source by Asian firms is influenced by a similar set of factors as those of U.S. firms. Across the two models we find strong support for the flotation costs hypothesis and the renegotiation and liquidation hypotheses, with the preference for foreign bonds and Eurobonds directly related to both the issue and firm size and inversely to the probability of distress. On the other hand, the evidence for the agency cost/monitoring hypothesis is somewhat mixed, with support for the monitoring role of bank debt in countries other than Japan and for reputation serving as a substitute for monitoring in Japan. There is also some evidence that cross-country differences in domestic financial market development impinge on debt choice in international markets.Finally, while the estimated relationships are stable over time, we find that the behaviour of Japanese firms is significantly different from that of firms from the other Asian countries. However, the determinants of debt choice of Japanese firms affiliated with either a horizontal or vertical keiretsu is not significantly different from independent Japanese firms.In Section II we describe the primary features of off-shore medium-to-long-term debt instruments. Then in Section III we specify a model of the determinants of the choice between public and private debt. The model is estimated using incremental data of loan/debt issues of Asian firms as described in Section IV. The results are then presented in Section V while Section VI concludes.