Global convergence of financing policies: Evidence for emerging-market firms
AbstractAs globalization spreads, one of the key challenges that emerging-market firms face is how to finance their growth opportunities. Using data from close to 10,000 firms from more than 30 emerging markets, this paper investigates how, over time, leverage is determined by firms’ business models, and also by the overall country environment. I find significant changes over the last two decades. In the early 1990s, country characteristics dominated firm characteristics, and it was difficult for firms to overcome the limitations of their domestic environment. As emerging markets became better integrated with the world economy, the importance of firm characteristics has increased. At the end of the sample period, emerging-market capital structure determinants resemble those of developed markets, and country characteristics have become less important in explaining financing structures. I also show how, over the last two decades, the maturity structure of debt has changed, and that in recent years firms with more tangible assets are able to attract more debt financing. Overall, I conclude that financing choices in emerging markets are now being made in the same way as in developed markets. This means that emerging-market firms now rely much more on their own strengths when obtaining debt than on country characteristics.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Journal of International Business Studies.
Volume (Year): 42 (2011)
Issue (Month): 8 (October)
Contact details of provider:
Web page: http://www.palgrave-journals.com/
Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elizabeth Gale).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.