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 The Expansion of Corporate Bond Markets in East Asia and Latin America


Facundo ABRAHAM Consultant, Macroeconomics and Growth, Development Research Group, The World Bank. Contact: fabraham@worldbank.org.
Juan J. CORTINA Consultant, Macroeconomics and Growth, Development Research Group, The World Bank. Contact: jcortinalorente@worldbank.org.
Sergio L. SCHMUKLER

Research Manager, Macroeconomics and Growth, Development Research Group, The World Bank. Contact: sschmukler@worldbank.org

After the 2008-2009 global financial crisis (GFC), emerging markets firms significantly increased their borrowing. While in 2009 aggregate corporate debt in emerging economies stood at $16 trillion U.S. dollars, by 2019 it had almost tripled, reaching $43 trillion U.S. dollars. As a share of emerging economies’ gross domestic product (GDP), corporate debt rose by 25 percentage points (p.p.) during this period, from 102% to 127% (IIF, 2020). An increase in corporate bond issuances explains most of the rise in corporate debt in emerging economies (Abraham et al., 2020). The patterns in emerging economies contrast with those in developed economies, where the ratio of corporate debt to GDP declined between 2009 and 2019. The rise in corporate bond markets has allowed firms to obtain cheap financing, but it has also generated concerns among…