A Study On The Market Timing Behavior Of Corporate Bond Issuance

In China,the research on the market timing behavior is mainly focused on the timing of the stock market,while the research on the timing of the bond market is very rare.In fact,the timing behavior of the bond market is very common.It is a very important decision to choose the timing of the bond issuance when the company is financing through the bond market.Therefore.this paper selects the Chinese A-share listed companies which issued corporate bond publicly in the 112 months from September 2007 to December 2016 as the research sample,studying the market timing behavior of corporate bond issuance from the following three aspects.Firstly,it tests the existence of the market timing behavior of corporate bond issuance.Secondly,it analyzes the influence of capital expenditure on the timing behavior,and the difference in the effect of capital expenditure on the timing behavior under different financing constraints.Thirdly,it further studies the economic consequences of the timing behavior of corporate bond issuance.such as whether the timing behavior has a significant impact on the firm value.The empirical result shows that there is a significant market timing behavior when Chinese A-share listed companies are publicly issuing corporate bond.That is to say,more companies will choose to issue corporate bond when the market interest rate is relatively low,and this market timing behavior is actually the reaction to past market interest rate information,rather than the prediction of future market interest rate fluctuations.Besides,it also finds that when the company gets the approval of corporate bond at a time when the market interest rate is relatively low,then the relative waiting degree of corporate bond issuance is also lower.In addition,after controlling other variables that may affect the timing behavior of corporate bond issuance,this paper finds that capital expenditure is negatively correlated with the timing behavior of corporate bond issuance,showing that companies with higher capital expenditure are less likely to time the bond market.Besides,after considering the financing constraints of different companies,there is a significant negative correlation between capital expenditure and the timing behavior of corporate bond issuance in companies with higher degree of financing constraints.However,in companies with lower degree of financing constraints,the correlation between capital expenditure and the timing behavior of corporate bond issuance is not significant.Finally,in the further analysis of the economic consequences of the timing behavior,this paper finds that after controlling other variables that may affect the firm value,the timing behavior of corporate bond issuance is not significantly related to the firm value and the change of firm value.That is to say,the timing behavior has no significant influence on the firm value.Based on the issuance of corporate bond in China,this paper preliminarily discusses the timing behavior of corporate bond issuance,which helps to enrich the relevant literature on corporate bond and market timing in China.In addition,this paper also provides reference for listed companies to make timing choices when issuing bond?and further helps to optimize the bond financing decisions of listed companies.