Prior research on market timing theory in relation to developing markets only analyzes equity issuance and provides contradictory results. Using a sample of large Russian companies in nonfinancial sectors between 2008 and 2015, this paper analyzes both equity and debt market timing to explore the impact of market timing on firms’ capital structure. To test the robustness of the results, we use several proxies for both timing types and include Russian-specific control variables of corporate governance and ownership. The results show that Russian companies time the debt market to attract extra capital if the value of the interest rate in the current period is lower than the rates in previous periods. The net debt issued decreases when interest rates are high, which indicates debt market timing. Consistent with previous studies, we find that Russian companies do not time the equity market. Added corporate governance factors suggest that younger boards of directors prefer debt financing to equity issuance, as well as more experienced ones. State ownership is negatively connected with leverage.
Using a unique panel database of more than 1,000 Russian public companies covering the period from 2004 to 2014, this study uses quantile regression techniques to investigate the moderating effects of foreign partners on company performance during the economic recession. The empirical findings are robust and confirm the positive impact of foreign ownership on limiting the negative effect of the recession on company performance. The strength of the impact depends on the level of firms’ financial results. The outcomes have implications for company investment policy. The evidence supports government policy towards encouraging foreign entry liberalization in emerging markets during periods of turbulence.
Our paper investigates the effects of corporate governance features on the cost of publicly traded debt in the Russian market after the global financial crisis. We consider a wide range of corporate governance mechanisms and focus our analysis on three elements relevant for emerging capital markets: state-owned bond issuers, auditor power (Big 4 or local firms) and CEO power. As control variables, we consider financial and non-financial indicators of bond issuers, including proxies of intellectual capital and transparency indicators, characteristics of bond issues, structure and size of the Board of Directors. We apply linear and multiplication regressions for unbalanced panel data. The original result is that, in the case of a sole executive body, bond spreads are higher. We find an inverse relation between the ex-post cost of public debt and audit power. The analysis also revealed a robust result that disclosing information on intangible assets and a larger Board of Directors reduce debtholder risks. According to our findings, debtholders take into account the risk of the influence of CEOs of large companies on local auditors, while for international auditors such influence is less possible. These results are robust to a large set of firm-specific and bondspecific characteristics.