Resumen de Banking liberalization and firms� debt structure: international evidence
Víctor Manuel González Méndez, Francisco González Rodríguez
This paper analyzes the effect of banking liberalization on firms� debt structure and how this effect varies across firm size and countries depending on bank supervision, investor protection, financial structure, and development of financial system. Results for 11,845 firms in 39 countries over the 1995-2004 period indicate that banking liberalization increases firm leverage and reduces its maturity. Debt availability increases in countries with stronger official and private supervision, better protection of property rights and lower protection of creditor rights, and more bank-oriented and less-developed financial systems. The reduction of debt maturity is greater in countries with stronger official supervision and property rights protection. Banking liberalization, moreover, affects small and large firms differently. Small firms in financially developed countries and large firms in less developed countries benefit least from banking liberalization.
