Banking sector reforms and corporate leverage in emerging markets
Senay Agca (),
Gianni De Nicolò and
Enrica Detragiache ()
Emerging Markets Review, 2013, vol. 17, issue C, 125-149
Using a large panel of non-financial firms in emerging markets, we study the relation between detailed measures of banking sector reforms and corporate leverage. We find that banking sector reforms are associated with lower corporate debt in emerging market firms, consistent with the notion that these reforms improve banks' risk management and result in tighter lending standards, leading firms to use less bank debt in their capital structure. These effects are less pronounced for financially constrained firms, suggesting a relative increase in the supply of bank credit to firms which were rationed prior to the banking sector reforms.
Keywords: Banking sector reforms; Emerging markets; Corporate debt; Capital structure; Credit constraints (search for similar items in EconPapers)
JEL-codes: G15 G20 G32 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:17:y:2013:i:c:p:125-149
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