Internationalization and the capital structure of firms in emerging markets: Evidence from Latin America before and after the financial crisis

Mauricio Melgarejo Duran and Sheryl-Ann Stephen

Research in International Business and Finance, 2020, vol. 54, issue C

Abstract: This study examines the impact of internationalization on the capital structure of firms in emerging markets before and after the financial crisis of 2008, with evidence from five countries in Latin America (Argentina, Brazil, Chile, Mexico, and Peru). We find that before the financial crisis, Latin American MNCs are characterized by lower debt levels than purely domestic firms. However, after the financial crisis, we find that the MNCs are characterized by higher debt levels. This finding suggests that after the financial crisis, the Latin American MNCs (like many firms) may be taking advantage of their access to low interest rates in the global capital markets.

Keywords: Internationalization; Multinationals; Capital structure; Debt; Security issuance (search for similar items in EconPapers)
JEL-codes: F23 F34 G15 G32 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:54:y:2020:i:c:s0275531920303329

DOI: 10.1016/j.ribaf.2020.101288

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