Schmukler, Sergio L.

Person:
Schmukler, Sergio L.

Development Research Group

Author Name Variants

Schmukler, Sergio, Schmukler, Sergio L., Schmukler, Sergio Luis

Fields of Specialization

Emerging market finance, Financial development, Financial integration, Financial Sector, Private Sector Development

ORCID

0000-0003-2842-5919

External Links

Author on Google
Bio page

Departments

Development Research Group

Last updated:October 6, 2025

Biography

Sergio Schmukler is the Research Manager of Macroeconomics and Growth in the World Bank's Development Research Group. His research area is international finance and international financial markets and institutions. He obtained his Ph.D. in Economics from the University of California at Berkeley in 1997, when he joined the World Bank's Young Economist and Young Professionals Programs. He currently teaches financial development at Columbia University. He is a member of the Money and Finance Research (Mo.Fi.R) group and Treasurer of LACEA, the Latin America and Caribbean Economic Association (since 2004). In recent years, he has visited the Bank for International Settlements (BIS), the Central Bank of Chile, CREI at Universitat Pompeu Fabra, the Dutch Central Bank, and the Hong Kong Institute for Monetary Research of the Hong Kong Monetary Authority. He has taught at the Department of Economics of University of Maryland (1999-2003), worked at the International Monetary Fund Research Department (2004-2005), was Associate Editor of the Journal of Development Economics (2001-2004), and has participated in several other editorial boards. In earlier years, he worked at the Argentine Central Bank, the U.S. Board of Governors of the Federal Reserve System, and the Inter-American Development Bank Research Department.

URI

https://hdl.handle.net/10986/38620

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Publication Search Results

Now showing1 - 10 of 105

Green versus Conventional Corporate Debt: From Issuances to Emissions
(Washington, DC: World Bank, 2025-10-02) Cortina, Juan J.; Raddatz, Claudio; Schmukler, Sergio L.; Williams, Tomas
This paper investigates how firms use green versus conventional debt and the associated firm- and aggregate-level environmental consequences. Employing a dataset of 127,711 global bond and syndicated loan issuances by non-financial firms across 85 countries during 2012–23, the paper documents a sharp rise in green debt issuances relative to conventional issuances since 2018. This increase is particularly pronounced among large firms with high carbon dioxide emissions. Local projections difference-in-differences estimates show that, compared to conventional debt, green bond and loan issuances are systematically followed by sustained reductions in carbon intensity (emissions over income) of up to 50 percent. These reductions correspond to as much as 15 percent of global annual emissions. Green bonds contribute to reducing emissions by providing financing to large, high-emitting firms, whose improvements in carbon intensity have significant aggregate consequences. Syndicated loans do so by channeling a larger volume of financing to a wider set of firms.
Crisis Credit, Employment Protection, Indebtedness, and Risk
(Washington, DC: World Bank, 2024-10-25) Huneeus, Federico; Kaboski, Joseph P.; Larrain, Mauricio; Schmukler, Sergio L.; Vera, Mario
This paper studies how credit guarantee and employment protection programs interact in supporting firms during crises, using real and financial administrative data for all firms and a quantitative macroeconomic model. Low interest rates encourage riskier firms to demand government-backed loans, while banks tend to reject those applications. The credit demand outweighs this screening response, expanding indebtedness. Given the opportunity cost of shutting down, the employment program’s take-up is unrelated to risk. The employment program mitigates the credit program expansion by supporting firms and enabling banks to screen them. Counterfactuals show how policy ingredients, including interest rate caps, limit macroeconomic risk.
The Internationalization of China’s Equity Markets
(World Bank, Washington, DC, 2023-07-18) Cortina, Juan J.; Martinez Peria, Maria Soledad; Schmukler, Sergio L.; Xiao, Jasmine
The internationalization of China’s equity markets started in the early 2000s but accelerated after 2012, when Chinese firms’ shares listed in Shanghai and Shenzhen gradually became available to international investors. This paper documents the effects of the post-2012 internationalization events by comparing the evolution of equity financing and investment activities for (i) domestic listed firms relative to firms that already had access to international investors and (ii) domestic listed firms that were directly connected to international markets relative to those that were not. The paper shows significant increases in financial and investment activities for domestic listed firms and connected firms, with sizable aggregate effects. The evidence also suggests that the rise in firms’ equity issuances was primarily and initially financed by domestic investors. Foreign ownership of Chinese firms increased once the locally issued shares became part of the Morgan Stanley Capital International (MSCI) Emerging Markets Index in 2018.
Inelastic Demand Meets Optimal Supply of Risky Sovereign Bonds
(Washington, DC: World Bank, 2024-03-26) Moretti, Matías; Pandolfi, Lorenzo; Schmukler, Sergio L.; Villegas Bauer, Germán; Williams, Tomás
This paper presents evidence of inelastic demand in the market for risky sovereign bonds and examines its interplay with government policies. The methodology combines bond-level evidence with a structural model featuring endogenous bond issuances and default risk. Empirically, the paper exploits monthly changes in the composition of a major bond index to identify flow shocks that shift the available bond supply and are unrelated to country fundamentals. The paper finds that a 1 percentage point reduction in the available supply increases bond prices by 33 basis points. Although exogenous, these shocks might influence government policies and expected bond payoffs. The paper identifies a structural demand elasticity by feeding the estimated price reactions into a sovereign debt model that isolates endogenous government responses. These responses account for a third of the estimated price reactions. By penalizing additional borrowing, inelastic demand acts as a commitment device that reduces default risk.
Growth of Global Corporate Debt: Main Facts and Policy Challenges
(World Bank, Washington, DC, 2020-09) Abraham, Facundo; Cortina, Juan J.; Schmukler, Sergio L.
This paper surveys the literature to document the main stylized facts, risks, and policy challenges related to the expansion of global nonfinancial corporate debt after the 2008–09 global financial crisis. Nonfinancial corporate debt steadily increased after the crisis, especially in emerging economies. Between 2008 and 2018, corporate debt increased from 56 to 96 percent of gross domestic product in emerging economies, whereas this ratio remained stable in developed economies. Nonfinancial corporate debt was mainly issued through bond markets, and its growth can be largely attributed to accommodative monetary policies in developed economies. Whereas increased debt financing has some positive aspects, it has also amplified firms' solvency risks and exposure to changes in market conditions, such as the economic downturn triggered by the COVID-19 pandemic. Because capital markets have a larger role in firm financing, policy makers have limited tools to mitigate the risks of growing firm debt.
The Boom in Corporate Borrowing after the Global Financial Crisis: Different Tales from East Asia and Latin America
(World Bank, Washington, DC, 2021-02-18) Abraham, Facundo; Cortina, Juan J.; Schmukler, Sergio L.
Firms from emerging economies increased their bond financing significantly after the 2008-09 global financial crisis. The patterns of corporate borrowing in East Asia and Latin America offer very different lessons. In East Asia, the main component behind the overall growth in bond financing was an expansion in domestic bond issuances, in domestic currency, by more and smaller firms. This expansion seems to be explained by a higher supply of funds by domestic investors, which lowered issuance costs. In Latin America, relatively larger firms tended to borrow from international markets issuing foreign currency bonds. These contrasting patterns have resulted in exposures to different types of risks. Risks in East Asia have been more related to the increasing debt accumulation by smaller firms, issuing debt at shorter maturities. Latin American firms have been more exposed to external factors and currency depreciations.
The Distribution of Crisis Credit: Effects on Firm Indebtedness and Aggregate Risk
(Washington, DC: World Bank, 2022-02-14) Huneeus, Federico; Kaboski, Joseph P.; Larrain, Mauricio; Schmukler, Sergio L.; Vera, Mario
This paper studies the distribution of credit during crisis times and its impact on firm indebtedness and macroeconomic risk. Whereas policies can help firms in need of financing, they can lead to adverse selection from riskier firms and higher default risk. The paper analyzes a large-scale program of public credit guarantees in Chile during the COVID-19 pandemic using unique transaction-level data on the demand and supply of credit, matched with administrative tax data, for the universe of banks and firms. Credit demand channels loans toward riskier firms, distributing 4.6 percent of gross domestic product and increasing firm leverage. Despite increased lending to riskier firms, macroeconomic risks remain small. Several factors mitigate aggregate risk: the small weight of riskier firms, the exclusion of the riskiest firms, bank screening, contained expected defaults, and the government absorption of tail risk. The empirical findings are confirmed with a model of heterogeneous firms and endogenous default.
International Asset Allocations and Capital Flows: The Benchmark Effect
(Elsevier, 2017-09) Raddatz, Claudio; Schmukler, Sergio L.; Williams, Tomás
Benchmark indexes have become important in financial markets for portfolio investment. In this paper, we study how international equity and bond market indexes impact asset allocations, capital flows, asset prices, and exchange rates across countries. We use unique monthly micro-level data of benchmark compositions and mutual fund investments during 1996–2014. We find that movements in benchmarks appear to have important effects on equity and bond mutual fund portfolio allocations, including passive and active funds. The effects persist after controlling for time-varying industry-level factors, country-specific effects, and macroeconomic fundamentals. Changes in benchmarks not only impact asset allocations, but also capital flows, abnormal returns in aggregate stock and bond prices, and exchange rates. These systemic effects occur not just when benchmark changes are announced, but also later, when they become effective. By impacting country allocations, benchmarks explain apparently counterintuitive movements in capital flows and asset prices, as well as contagion effects.
Capital Market Financing and Firm Growth
(World Bank, Washington, DC, 2020-07) Levine, Ross; Didier, Tatiana; Llovet Montanes, Ruth; Schmukler, Sergio L.
This paper studies whether there is a connection between finance and growth at the firm level. It employs a new dataset of 150,165 equity and bond issuances around the world, matched with income and balance sheet data for 62,653 listed firms in 65 countries over 1990-2016. Three main patterns emerge from the analyses. First, firms that choose to issue in capital markets use the funds raised to grow by enhancing their productive capabilities, increasing their tangible and intangible capital and the number of employees. Growth accelerates as firms raise funds. Second, the faster growth is more pronounced among firms that are more likely to face tighter financing constraints, namely, small, young, and high-R&D firms. Third, capital market issuances are associated with faster growth among firms located in countries with more developed capital markets relative to banks. Capital markets are also comparatively effective at allowing financially constrained firms to raise capital.
Using Big Data to Expand Financial Services: Benefits and Risks
(World Bank, Washington, DC, 2019-11) Abraham, Facundo; Schmukler, Sergio L.; Tessada, Jose
Big data is transforming financial services around the world. Advances in data analytics and computational power are allowing firms to exploit data in an easier, faster, and more reliable manner, and at a larger scale. By using big data, financial firms and new entrants from other sectors are able to provide more and better financial services. Governments are also exploring ways to use big data collected by the financial sector more systematically to get a better picture of the financial system as a whole and the overall economy. Despite its benefits, the wider use of big data has raised concerns related to consumer privacy, data security, discrimination, data accuracy, and competition. Hence, policy makers have started to regulate and monitor the use of big data by financial institutions and to think about how to use big data for the benefit of all.