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Financing Constraints and Investment Decline in Mexico Author info | Abstract | Publisher info | Download info | Related research | Statistics Talan B. Iscan () (Department of Economics, Dalhousie University)
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To what extent can financing constraints, which have been so central to foreign debt related explanations of investment decline in heavily indebted economies, account for low investment rates in Mexico after 1982? In order to investigate the implications of financing constraints hypothesis on investment decisions, this study employs a cost-of-adjustment model of investment and annual panel data of Mexican manufacturing industries covering the period 1970 to 1990. It is found that part of the debt crisis effects on investment, identified in the earlier literature, may be due to binding financing constraints in Mexico.
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Paper provided by Dalhousie, Department of Economics in its series Department of Economics at Dalhousie University working papers archive with number
fdis98.
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Length: 26 pages
Date of creation: 10 Mar 1998Date of revision:
Handle: RePEc:dal:wparch:fdis98Contact details of provider: Postal: Halifax, Nova Scotia, B3H 3J5 Phone: (902) 494-2026 Fax: (902) 494-6917 Email: Web page: http://www.economics.dal.ca More information through EDIRC
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Keywords: debt crisis financing constraints investment Mexican manufacturing industry Other versions of this item:
Find related papers by JEL classification: F31 - International Economics - - International Finance - - - Foreign Exchange
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"Internal Net Worth and the Investment Process: An Application to U.S. Agriculture ,"
Journal of Political Economy ,
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[Downloadable!] (restricted)
Other versions:
R. Glenn Hubbard & Anil Kashyap, 1990.
"Internal Net Worth and the Investment Process: An Application to U.S. Agriculture ,"
NBER Working Papers
3339, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) R. Glenn Hubbard & Anil K. Kashyap, 1991.
"Internal net worth and the investment process: an application to U.S. agriculture ,"
Working Paper Series, Macroeconomic Issues
91-27, Federal Reserve Bank of Chicago.
R. Glenn Hubbard & Anil Kashyap, 1990.
"Internal net worth and the investment process: an application to U.S. agriculture ,"
Finance and Economics Discussion Series
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Warner, Andrew M, 1992.
"Did the Debt Crisis Cause the Investment Crisis? ,"
The Quarterly Journal of Economics ,
MIT Press, vol. 107(4), pages 1161-86, November.
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Other versions: Warner, Andrew M., 1994.
"Mexico's investment collapse: debt or oil? ,"
Journal of International Money and Finance ,
Elsevier, vol. 13(2), pages 239-256, April.
[Downloadable!] (restricted)
Hansen, Lars Peter, 1982.
"Large Sample Properties of Generalized Method of Moments Estimators ,"
Econometrica ,
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Rodrik, Dani, 1991.
"Policy uncertainty and private investment in developing countries ,"
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Other versions: Pindyck, Robert S, 1993.
"A Note on Competitive Investment under Uncertainty ,"
American Economic Review ,
American Economic Association, vol. 83(1), pages 273-77, March.
[Downloadable!] (restricted)
Demirguc-Kunt, Asli & Detragiache, Enrica, 1992.
"Interest rates, official lending, and the debt crisis : a reassessment ,"
Policy Research Working Paper Series
932, The World Bank.
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Other versions:
Demirguc-Kunt, Asli & Detragiache, Enrica, 1994.
"Interest rates, official lending, and the debt crisis: A reassessment ,"
Journal of Development Economics ,
Elsevier, vol. 44(2), pages 263-285, August.
[Downloadable!] (restricted) Oliner, Stephen & Rudebusch, Glenn & Sichel, Daniel, 1995.
"New and Old Models of Business Investment: A Comparison of Forecasting Performance ,"
Journal of Money, Credit and Banking ,
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[Downloadable!] (restricted)
Other versions: Hayashi, Fumio & Inoue, Tohru, 1991.
"The Relation between Firm Growth and Q with Multiple Capital Goods: Theory and Evidence from Panel Data on Japanese Firms ,"
Econometrica ,
Econometric Society, vol. 59(3), pages 731-53, May.
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Other versions: Steven Fazzari & R. Glenn Hubbard & Bruce C. Petersen, 1988.
"Financing Constraints and Corporate Investment ,"
NBER Working Papers
2387, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Andrew B. Abel & Olivier J. Blanchard, 1987.
"The Present Value of Profits and Cyclical Movements in Investment ,"
NBER Working Papers
1122, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions: Bond, Stephen & Meghir, Costas, 1994.
"Dynamic Investment Models and the Firm's Financial Policy ,"
Review of Economic Studies ,
Blackwell Publishing, vol. 61(2), pages 197-222, April.
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Other versions: Stiglitz, Joseph E & Weiss, Andrew, 1981.
"Credit Rationing in Markets with Imperfect Information ,"
American Economic Review ,
American Economic Association, vol. 71(3), pages 393-410, June.
[Downloadable!] (restricted)
Caballero, Ricardo J, 1991.
"On the Sign of the Investment-Uncertainty Relationship ,"
American Economic Review ,
American Economic Association, vol. 81(1), pages 279-88, March.
[Downloadable!] (restricted)
Steven M. Fazzari & R. Glenn Hubbard & Bruce C. Petersen, 1988.
"Financing Constraints and Corporate Investment ,"
Brookings Papers on Economic Activity ,
Economic Studies Program, The Brookings Institution, vol. 19(1988-1), pages 141-206.
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