HOME » wiiw Working Papers » Access to Finance and Composition of Funding ...
In 2009, Latin America was sucked into the financial crisis which, following the bankruptcy of Lehman Brothers, echoed around the globe and shook and shocked the entire global financial system. As a consequence, Latin America experienced a slump in real GDP growth, a drop in exports and a collapse in inward FDI flows. Against that backdrop, the paper sheds light on the effects the global financial crisis had on firms’ access to financing as well as on their funding strategies of investment projects. The analysis uses data collected as part of the World Bank Enterprise Survey (WBES) component of the Latin American and Caribbean (LAC) Enterprise Surveys 2006 and 2010 and demonstrates that during the crisis, the availability of internal capital markets played a pivotal role for larger and foreign firms or firms that were part of a larger firm; in contrast, no evidence is found that state-owned firms enjoyed preferential treatment or special budgetary support. In addition, it shows that in the face of the crisis, entrepreneurs adapted their funding strategies: firms whose access to financing deteriorated, more intensely relied on bank and supply-chain-financing, foreign firms or firms that were part of a group more strongly availed of internal funds, while firms that both export and import more intensely drew on bank credits to fund their investment projects.
wiiw Working Papers
(free PDF download)
 |
Access to Finance and Composition of Funding during the Crisis: A firm-level analysis for Latin American countries (by Sandra Leitner and Robert Stehrer) wiiw Working Paper No. 78, February 2012 38 pages including 20 Tables and 6 Figures FREE DOWNLOAD
Keywords: financial crisis, access to financing, capital structure, firm level, Latin America JEL classification: G01, G11, D22, L16 Countries covered: Latin America Topics: Macroeconomic Analysis and Policy |
Add to cartIn 2009, Latin America was sucked into the financial crisis which, following the bankruptcy of Lehman Brothers, echoed around the globe and shook and shocked the entire global financial system. As a consequence, Latin America experienced a slump in real GDP growth, a drop in exports and a collapse in inward FDI flows. Against that backdrop, the paper sheds light on the effects the global financial crisis had on firms’ access to financing as well as on their funding strategies of investment projects. The analysis uses data collected as part of the World Bank Enterprise Survey (WBES) component of the Latin American and Caribbean (LAC) Enterprise Surveys 2006 and 2010 and demonstrates that during the crisis, the availability of internal capital markets played a pivotal role for larger and foreign firms or firms that were part of a larger firm; in contrast, no evidence is found that state-owned firms enjoyed preferential treatment or special budgetary support. In addition, it shows that in the face of the crisis, entrepreneurs adapted their funding strategies: firms whose access to financing deteriorated, more intensely relied on bank and supply-chain-financing, foreign firms or firms that were part of a group more strongly availed of internal funds, while firms that both export and import more intensely drew on bank credits to fund their investment projects.
Visitors who downloaded this publication/presentation also downloaded:
|
Trade-Induced Technical Change? The Impact of Chinese Imports on Innovation, IT and Productivity (by Nick Bloom, Mirko Draca and John van Reenen) wiiw Global Economy Lecture 22 October 2012, 4 p.m., Oesterreichische Nationalbank, Vienna 9, Otto-Wagner-Platz 3, OeNB auditorium, ground floor DETAILS |
|
What went wrong in Slovenia and how to get out of the mess? (by Joze P. Damijan) wiiw Seminar Series 'EU in Crisis' 08 October 2012, 5 p.m., Venue: wiiw, 1060 Vienna, Rahlgasse 3 DETAILS |
|
The European Rim Countries - Challenges and Opportunities for EU Competitiveness (by Vasily Astrov, Peter Havlik, Mario Holzner, Gabor Hunya, Isilda Mara, Sandor Richter, Roman Stöllinger and Hermine Vidovic) wiiw Policy Note and Report No. 9, October 2012 49 pages including 3 Tables and 12 Figures DETAILS |
