Chapter 23 What are the next steps for bond market development in Thailand?

Jonathan A. Batten; Pongsak Hoontrakul

doi:10.1016/S1569-3767(07)00023-4

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International Finance Review

ISSN: 1569-3767
Series editor(s): Professor J. Jay Choi

Subject Area: Accounting and Finance

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Chapter 23 What are the next steps for bond market development in Thailand?

Document Information:
Title:	Chapter 23 What are the next steps for bond market development in Thailand?
Author(s):	Jonathan A. Batten, Pongsak Hoontrakul
Volume:	8 Editor(s): Suk-Joong Kim, Michael D. Mckenzie ISBN: 978-0-7623-1471-3 eISBN: 978-1-84950-514-7
Citation:	Jonathan A. Batten, Pongsak Hoontrakul (2007), Chapter 23 What are the next steps for bond market development in Thailand?, in Suk-Joong Kim, Michael D. Mckenzie (ed.) Asia-Pacific Financial Markets: Integration, Innovation and Challenges (International Finance Review, Volume 8), Emerald Group Publishing Limited, pp.497-519
DOI:	10.1016/S1569-3767(07)00023-4 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Article type:	Chapter Item
Abstract:	Recently East Asian policymakers have focused on facilitating corporate bond market development through a host of financial market reforms including greater foreign participation in the domestic markets as issuers and investors. However, the alternate approach – the encouragement of domestic issuers to further tap international markets – remains largely ignored. The objective of this study is to investigate these issues in the context of reform undertaken by Thailand following the Asian Crisis of 1997. As a small and open economy, Thailand was forced to become more receptive to foreign investment and capital market participation. We raise the significance of bond return volatility and skewness as an impediment to greater involvement by international investors. Empirical analysis highlights the time-varying nature of both variance and skewness of bond returns, which can only be overcome through government policy that focuses upon stabilizing the macroeconomic environment and not simply enhancing domestic and regional financial market infrastructure.