This paper examines Korea's recent experience with financial liberalization to find empirical evidence for the McKinnon-Shaw hypothesis regarding the effect of financial liberalization on the allocative efficiency of credit. This involves analyzing changes in the variation of average borrowing...

This paper analyzes the role of capital market imperfections for investment decisions, and investigates whether the financial reforms introduced in the 1980s have succeeded in relaxing financial constraints. The estimated equations do not provide evidence that financial reform in Ecuador has...