Alternative methodologies for the analysis of financing restrictions in Argentina

Working papers | 2006 | N 2

Abstract

The presence of financial restrictions distorts the productive and financial decisions of companies, with substantial macroeconomic implications in terms of investment, growth, inflation and income distribution. Despite their substantive importance, these restrictions cannot be observed directly except through a particular theoretical framework, from which empirically testable propositions are derived. In this sense, the first objective of the present study is to evaluate the relative relevance of the different existing theoretical approaches, using an unbalanced panel for Argentina, which includes 71 companies with public offering of shares between 1990 and 2004. With this information, examines the incidence, the differential scope (between different groups of companies), the sensitivity to the estimation method (and the underlying theoretical model), the temporal evolution and the main macroeconomic determinants of financing restrictions in Argentina. Finally, the second objective of our research lies in developing a simple and appropriate methodology to monitor the evolution of financing restrictions, and thus be able to examine the effectiveness of the different policies aimed at improving the functioning of the financial system.

JEL classification: G12, G15, G14, E44, O54, O16, C23