What promotes/prevents firm bond issuance in emerging economies: Bank-firm relationship or information asymmetry?

This study investigates the factors that promoted and prevented issue of debt securities by firms in emerging markets during 2000-2014. First, we find that borrowers in emerging economies are more likely to approach the debt security market as the funding size grows quickly. Second, we find that firm information asymmetry, a common feature of emerging markets, moderates the negative relationship between the firm's financial constraints and debt security issuance. Consequently, we conclude that a borrower with a fast-growing funding demand desires debt security issuance, but firm information asymmetry limits access to the debt security market in emerging economies.