Bond Market Development in Asia : An Empirical Analysis of Major Determinants

One of the reasons behind the financial crisis in 1997 was the excessive dependence of Asian economies on commercial banks for domestic financing. Banks were the major source of corporate financing because bond markets were underdeveloped and small. To enhance corporate bond financing, it is important to examine the factors that promote effective development of bond markets. This study attempts to identity the determinants of bond market development in Asian economies, through examining its relationship with selected key financial and economic factors, and to provide policy recommendations for further development