Firm Size as Determinant of the Nonlinear Relationship Between Bank Debt and Growth Opportunities: The Case of Chilean Public Firms

Paolo Saona Hoffmann, Mauricio Jara Bertin and Marta Moreno Warleta

Emerging Markets Finance and Trade, 2014, vol. 50, issue 1S, 265-293

Abstract: We analyze the extent to which firm size determines the relationship between growth opportunities and bank debt in the Chilean corporate sector. Using generalized method of moments (GMM) system estimator techniques in an unbalanced panel data of quoted firms, we provide evidence of a U-shaped relationship between growth opportunities and bank debt, which has a different behavior depending on the firm's size. Smaller firms seek private debt sooner than larger firms do when growth opportunities increase. This finding is supported by the institutional characteristics of the Chilean financial system, the higher confidence of small firms in bank debt, and the bank-based orientation of the Chilean financial markets.

Keywords: bank debt; Chilean public firms; firm size; growth opportunities (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://mesharpe.metapress.com/link.asp?target=contribution&id=Y3R7W44287H832X3 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:50:y:2014:i:1s:p:265-293

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MREE20

Access Statistics for this article

More articles in Emerging Markets Finance and Trade from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().