Abstract
This article investigates the post-issuance performance of firms in the German SME Bond (Mittelstandsanleihen) market segment. In particular, we ask if issuers’ operating performance is significantly different relative to an ex-ante indistinguishable non-issuer control sample. To properly identify the comparison sample and avoid endogeneity concerns, we implement a propensity score matching process based on a set of financial variables. Our main results show that issuers actually display lower post-issuance operating performance which amplifies their financial fragility. Our results contribute to the discussion if the poor performance of this market segment could have been identified ex-ante.
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