Consequences of firms'relational financing in the aftermath of the 1995 Mexican banking crisis

Gonzalo Castañeda
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Gonzalo Castañeda: Universidad de las Américas, Puebla, http://www.udlap.mx/
Authors registered in the RePEc Author Service: Gonzalo Castañeda ()

Journal of Applied Economics, 2005, vol. 8, 53-79

Abstract: This paper shows that, in the aftermath of the 1995 banking crisis, relational financing was a two-edged sword for firms listed on the Mexican Securities Market. On the negative side, only bank-linked firms observed on average a dependence on cash stock to finance their investment projects. On the positive side, the banking connection was important to boost their profit rates during the 1997-2000 period, at least for financially healthy firms. These econometric results are derived from dynamic panel data models of investment and profit rates, which are estimated by the Generalized Method of Moments, where level and difference equations are combined into a system.

Keywords: relational financing; banking crisis; internal capital markets (search for similar items in EconPapers)
JEL-codes: D82 L25 N26 (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Consequences of Firms' Relational Financing in the Aftermath of the 1995 Mexican Banking Crisis (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:cem:jaecon:v:8:y:2005:n:1:p:53-79

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