Three essays on firm financingthe supply side of capital, issuance activity and real behaviour

Abstract

This thesis is composed of three research articles investigating changes in firm financing and real behavior associated to changes in the supply of capital in global and domestic financial markets. For identification, the studies focus on events that implied important changes in the supply side of capital that were plausibly exogenous to the firms. The empirical designs are founded on the simultaneous consideration of firms’ financial choices in different financial markets and the analysis of the effects of those choices on the balance-sheet statements of the issuers. The first chapter studies the causes behind the acceleration in outstanding corporate debt in emerging economies since the Global Financial Crisis of 2008-09. The chapter shows evidence consistent with an expansion in the supply of capital through bond markets since the crisis, which prompted an important increase in corporate debt issuance activity, financial risks, and changes in debt composition. Through the study of two quasi-experiments, the second chapter provides plausibly causal evidence of the effects of exogenous changes in the investor base on firm financing and investment policies. The two events find economically large effects and are associated to the impact of international benchmark indexing and a series of capital market reforms in China that started in 2013...