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Emerging Markets Capital Structure and Financial Integration

Brian M. Lucey, QiYu Zhang, School of Business, Trinity College Dublin, Ireland


This paper studies the impact of international financial integration on corporate financing choices, at a country level. Examining publically quoted firms of 24 emerging economies over the 1995-2007 period, we find that greater bond market integration is associated with increased leverage and a longer debt maturity. Measuring credit market integration via bank loan channels we find that increased integration leads to shorter debt maturity. In comparison with other firms, large firms tend to have higher leverage and longer debt maturity, and firms in common law countries have a longer debt maturity as financial integration increases. We find relatively little impact on emerging market firms capital structure choices when we examine equity market integration.

Keywords: International financial integration; Emerging market firms; Capital structure

Corresponding author: E-mail addresses: (Q. Zhang), (B. M. Lucey)

Last updated 28 August 2014 by IIIS (Email).