IMF Working Papers Volume 2001 Issue 095: Globalization and Firms' Financing Choices: Evidence From Emerging Economies (2001)

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Globalization and Firms' Financing Choices: Evidence From Emerging Economies

Author:

Mr. Sergio L. Schmukler

Mr. Sergio L. Schmuklernull

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Mr. Esteban Vesperoni

Mr. Esteban Vesperoninull

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Series:: IMF Working Papers

Volume/Issue:: Volume 2001: Issue 095

Publication Date:: 01 Aug 2001

DOI:: https://doi.org/10.5089/9781451851823.001

ISBN:: 9781451851823

ISSN:: 1018-5941

Pages:: 26

Keywords:: WP; maturity structure; debt-equity variable; financial liberalization; debt-equity ratio; liberalization policy; financing choices; financial structure; financial integration; financial globalization; international financial markets; International capital markets; Stock markets; Stocks; Financial sector development; International bonds; East Asia

Legal-disclaimer:: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Series:: IMF Working Papers

Volume/Issue:: Volume 2001: Issue 095

Language:: English

Publication Date:: 01 Aug 2001

DOI:: https://doi.org/10.5089/9781451851823.001

ISBN:: 9781451851823

ISSN:: 1018-5941

Pages:: 26

Keywords:: WP; maturity structure; debt-equity variable; financial liberalization; debt-equity ratio; liberalization policy; financing choices; financial structure; financial integration; financial globalization; international financial markets; International capital markets; Stock markets; Stocks; Financial sector development; International bonds; East Asia

Legal-disclaimer:: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

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This paper studies the relation between firm's financing choices and financial globalization. Using an East Asian and Latin American firm-level panel for the 1980s and 1990s, we study how leverage ratios, debt maturity structure, and sources of financing change when economies are liberalized and when firms access international capital markets. We find that debt-equity ratios do not increase after financial liberalization. Debt maturity shortens for the average firm when countries undertake financial liberalization. However, domestic firms that actually participate in international capital markets extend their debt maturity. Financial liberalization has less effects on firms from countries with more developed domestic financial systems. Leverage ratios increase during crises.

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IMF Working Papers

ISSN:: 1018-5941

Publisher:: International Monetary Fund

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