Determinants of Corporate Bond Demand: A Study in Vietnam
Journal Title: Journal of Economics, Finance and Management Studies - Year 2023, Vol 6, Issue 04
Abstract
Recently, corporate bond has been becoming a controversial debate topic in Vietnam. During 2022 Vietnamese economy experienced several devastating scandals relating to corporate bond that leading to the issuance of several legal regulations by the Government. Realistically, given the strong encouragement of Vietnamese Government, the size of corporate bond market has reached approximately 21% of national GDP (VCCI, 2022) illustrating a considerable attention of potential investors and local businesses on this typical capital raising instruments. However, from both academic and society perspectives, there has been a research gap in the extant literature review on the underlying reasons for corporate bond demand in an emerging country. Hence, the study aims to comprehensively examine the determinants of investor demand for corporate bond in the context of Vietnam. The research objectives are achieved by applying both qualitative and quantitative approaches. While the qualitative method which based on VCCI (2022) questionnaires to identify and document the corporate bond demand, the quantitative method provides statistical evidences on determinants of corporate bond demand. The research result show that the credit risk and bond market presence are significant attributes for investor demand. These indicators are more pronounced during the crisis period which is explained by information asymmetry theory and the benefit of diversifications. The research findings are consistent with prior studies of Hotchkiss and Ronen (2002), Hale and Santos (2008) stating that high investor demand shorten the time for subsequent bond issuance events and potentially reduces the corporate’s cost of capital. Therefore, the research is beneficial to the Government, corporate bond issuers and researchers.
Authors and Affiliations
Ha Hong Hanh
Keywords
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- EP ID EP727004
- DOI 10.47191/jefms/v6-i4-32
- Views 12
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