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Banking reform and the financing of firm investment: An empirical analysis of the Chilean experience, 1983-92

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  • Niels Hermes
  • Robert Lensink

Abstract

This article investigates whether the Chilean banking reforms of the 1980s have contributed to reducing market imperfections in Chilean financial markets in the late 1980 and early 1990s. To analyse this issue, patterns of investment and its finance for different types of firms are studied, based on balance sheet information of a panel of 70 firms. The most important conclusion is that those specific reforms, aimed at reducing intra-conglomerate lending, seem to have been successful, since access of non-conglomerate firms has increased, indicating a reduction of existing market imperfections for such firms.

Suggested Citation

  • Niels Hermes & Robert Lensink, 1998. "Banking reform and the financing of firm investment: An empirical analysis of the Chilean experience, 1983-92," Journal of Development Studies, Taylor & Francis Journals, vol. 34(3), pages 27-43.
    • Handle: RePEc:taf:jdevst:v:34:y:1998:i:3:p:27-43
    DOI: 10.1080/00220389808422519
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    References listed on IDEAS

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    1. Sergio de la Cuadra & Salvador Valdés, "undated". "Myths and Facts About Instability in Financial Liberalization in Chile: 1974-1983," Documentos de Trabajo 128, Instituto de Economia. Pontificia Universidad Católica de Chile..
    2. repec:ucp:bkecon:9780226184890 is not listed on IDEAS
    3. Salvador Valdés & Peter Diamond, "undated". "Social Security Reforms in Chile," Documentos de Trabajo 161, Instituto de Economia. Pontificia Universidad Católica de Chile..
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    Cited by:

    1. Espanol, Paula, 2006. "Why exporters can be financially constrained in a recently liberalised economy? A puzzle based on Argentinean firms during the 1990s," Proceedings of the German Development Economics Conference, Berlin 2006 7, Verein für Socialpolitik, Research Committee Development Economics.
    2. Yan, Isabel K. & Chan, Kenneth S. & Dang, Vinh Q.T., 2011. "Financial liberalization and financing constraints: some evidence from panel data of listed Chinese firms," MPRA Paper 35227, University Library of Munich, Germany.
    3. Yan, Isabel K. & Chan, Kenneth S. & Dang, Vinh Q.T., 2011. "Financial liberalization, financing constraints and political connection: evidence from Chinese firms," MPRA Paper 35223, University Library of Munich, Germany.
    4. Moncef Guizani & Ahdi Noomen Ajmi, 2020. "Financial conditions, financial constraints and investment-cash flow sensitivity: evidence from Saudi Arabia," Journal of Economic and Administrative Sciences, Emerald Group Publishing Limited, vol. 37(4), pages 763-784, September.
    5. Moncef Guizani, 2021. "Macroeconomic conditions and investment–cash flow sensitivity: Evidence from Saudi Arabia," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 4277-4294, July.
    6. Chan, Kenneth S. & Dang, Vinh Q.T. & Yan, Isabel K.M., 2012. "Financial reform and financing constraints: Some evidence from listed Chinese firms," China Economic Review, Elsevier, vol. 23(2), pages 482-497.
    7. Niels Hermes & Robert Lensink, 2005. "Does Financial Liberalization Influence Saving, Investment and Economic Growth?: Evidence from 25 Emerging Market Economies, 1973-97," WIDER Working Paper Series RP2005-69, World Institute for Development Economic Research (UNU-WIDER).

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