Abstract
We show that sovereign bond benchmarks are important determinants of corporate bond issuance and maturity. Sovereign bond issues that increase a countrys maximum maturity are followed by increases in the maximum maturity of corporate issues. Our results suggest that by providing benchmark rates, long-maturity government issues complement the issuance of similar-maturity corporate issues. Sovereign and corporate bond issues can also be substitutes, but we find that this substitutability requires the availability of a high-quality sovereign bond benchmark. Our findings highlight the role that sovereign debt and its maturity play in capital market development
| Original language | English |
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| Place of Publication | Melbourne, Australia |
| Commissioning body | University of Melbourne |
| Number of pages | 40 |
| Publication status | Published - 2021 |