Loan versus Bond Financing of Czech Companies and the influence of the Global Recession

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dc.contributor.authorMačí, Jancs
dc.contributor.authorHovorková Valentová, Vladimíracs
dc.date.accessioned2018-09-25T12:09:59Z
dc.date.available2018-09-25T12:09:59Z
dc.date.issued2017cs
dc.description.abstractEuropean economies are traditionally considered to be bank based regarding the debt financing. However, in times of crises in the bank sector, this feature may indicate a weakness of these economies when the credit squeeze phenomenon may occur and companies’ competitiveness might be negatively affected thanks to unstable financing possibilities. In such conditions, a shift from bank loans to bonds might be expected. That is why this paper focuses on mutual development of corporate bond and business loan markets in the developing Czech economy in the years 2006–2014 with regard to the impacts of the global financial crisis of 2008/2009. The main goal of this article is to identify whether, thanks to the impacts of the global recession in 2009, there was a shift in Czech economy in business financing from the loans to bonds in a similar fashion as in the case of East Asian economies after their financial crisis in the nineties. Since Czech companies practically do not use short-term bonds, a mutual relationship is examined between amounts of long-term corporate bonds and economic development captured by the GDP per capita, and between long-term business loans and development of long-term corporate bonds. The main findings of this study are that since the global financial crisis, bond financing of businesses has been growing faster than loan financing. Czech economy thus shifts and becomes more bond market-based. The development of bond financing is positively correlated with the GDP per capita. Time series of both loans and bonds develop along the same trend. However, residual components are correlated negatively, which confirms the standing of loans and bonds as substitutes. Two main practical implications may be derived from this study. First, a growing usage of bonds increases demands on the market regulator, especially in the field of monitoring. Second, the growing bond market leads to the increased effectiveness, which makes additional effective sources of finance available to businesses and makes Czech economy more competitive even in times of difficulties in the banking sector.en
dc.format.extent17cs
dc.identifier.doi10.7441/joc.2017.01.05
dc.identifier.issn1804-171Xcs
dc.identifier.urihttps://dspace.tul.cz/handle/15240/30584
dc.language.isoengcs
dc.publisherTomas Bata University in Zlincs
dc.publisher.cityZlíncs
dc.relation.ispartofseries1cs
dc.relation.urihttp://www.cjournal.cz/files/242.pdfcs
dc.subjectcorporate financecs
dc.subjectcorporate governancecs
dc.subjectliabilitiescs
dc.subjectbondscs
dc.subjectloanscs
dc.subjectfinancial crisiscs
dc.subjectrecessioncs
dc.subjectcapital market developmentcs
dc.subjectcorporate finance
dc.subjectcorporate governance
dc.subjectliabilities
dc.subjectbonds
dc.subjectfinancial crisis
dc.subjectrecession
dc.subjectcapital market development
dc.subjectloans
dc.titleLoan versus Bond Financing of Czech Companies and the influence of the Global Recessionen
dc.titleLoan versus Bond Financing of Czech Companies and the influence of the Global Recessioncs
local.citation.epage72-88cs
local.citation.spage72-88cs
local.identifier.publikace4032
local.relation.issue1cs
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