Corporate Bond Pricing: A Systematic Literature Review on Influential Factors

A systematic literature review on the pricing of corporate bonds worldwide is provided. Bonds are essential financing mechanisms for companies and are vital to transfer resources and catalyze economic growth. The democratizing potential of capital markets is highlighted, emphasizing that anyone can become an investor, facilitating wealth creation and boosting national economy. The main exploration of the study is bond pricing process in financial markets, focusing on the determinant factors of the price of these securities. Through a systematic literature review (SLR), the research elucidates complex relationships between bond valuation, credit characteristics and macroeconomic indicators. The greatest contribution is a final table that categorize factors into corporate, issuance, liquidity and macroeconomic/market based on 40 selected articles. This categorization is important as a guide for future works. The existing literature lacks comprehensive reviews on the factors influencing corporate bond prices, and there is a notable absence of categorizations of these factors.