Determinants of Issuing Public Debt by Small and Medium – Sized Enterprises

The question of researching sources of borrowed capital is a topical managerial decision in the sphere of corporate finance. Understanding the factors influencing the issuance of public debt is important for both - companies - issuers, as it provides insight into the company's capabilities, and for investors seeking alternatives to bank deposits, aiming to minimize risks when investing in lesser-known companies. There are numerous studies on the growing interest in public issuance. However, most attention in previous Russian and foreign studies has been focused on corporate bonds issued by large organizations, or factors affecting bond yields, rather than the reasons for their issuance. In this connection, there is particular interest in researching the impact of determinants on the probability of bond issuance by small and medium-sized enterprises (SMEs). The sample consists of non-financial Russian companies that issued bonds in 2022, and analogous companies from the same industry, comparable in terms of revenue and market share, but did not issue bonds during the same period. The study was conducted using logistic regression models. The analysis reveals that for Russian non-financial SMEs, the influence of financial indicators is not characteristic, unlike large companies. The model's quality was evaluated using binary classification metrics: ROC-AUC, confusion matrix, accuracy, precision, recall, and F1-measure. Keywords: borrowed capital, bond market, public debt, SMEs.