Using a large set of panel data for Ecuadorian firms, the authors analyze the role of capital market imperfections in investment decisions and investigate whether the financial reforms introduced in the 1980s in Ecuador succeeded in relaxing financial constraints. To facilitate capital...

One of the best documented empirical facts in economic research has been the positive relationship between internal finance and cash flows and capital expenditures and investment. But disputes about the analytical basis for the cash flow theory have been largely unresolved. There are two...

Economists often characterize the regulation of monopolies as a"game"(between the regulator and the service provider) in which the two players do not share the same information. The regulator is assumed to have poorer information than the service provider about the scope of future efficiency...

Mexico's economic crisis in December 1994 gave renewed importance to the issue of"spillover"or"contagion"effects in other emerging market economies (and their sensitivity to events in larger countries in the region.) They focus on how small open economies are affected by their neighbors'ecomomic...

Financial reform is often accompanied by other changes, including structural adjustment. Entrepreneurs'judgements about investing in a post-reform world are important but so are banks'considerations of the sunk costs of investments in both physical capital and information development. The...

The relationship between the financial, and real sides of the economy has long been a topic of intense interest, and debate. The author provides microeconomic evidence that financial development aids growth, by reducing financing constraints that would otherwise restrict efficient firm...

What are the relative advantages and disadvantages of bank-based financial systems (as in Germany and Japan) and market-based financial systems (as in England and the United States). Does financial structure matter? In bank-based systems banks play a leading role in mobilizing savings,...

This paper examines the impact of bank regulations, concentration, inflation, and national institutions on bank net interest margins using data from over 1,400 banks across 72 countries while controlling for bank-specific characteristics. The data indicate that tighter regulations on bank entry...

East Asia's financial crisis has been attributed in part to the weak performance and risky financial structures of Asian corporations. In the period before Asia's financial crisis, however, analysts were not suggesting that the financial structure of many East Asian corporations would be unable...

Policies and procedures to resolve bank failures have evolved significantly in Argentina since the introduction of currency convertibility in 1991, and particularly in reaction to the 1995"tequila"crisis, which exposed the inadequacy of the bank exit framework in place then. The author reviews...