جهانی شدن مالی و سررسید بدهی در اقتصادهای در حال ظهور

This paper studies how financial globalization affects debt structure in emerging economies. We find that by accessing international markets, firms increase their long-term debt and extend their debt maturity. In contrast, with financial liberalization, l

The advocates of financial globalization argue that the integration of countries with the world financial system can have many benefits, particularly for emerging economies with segmented financial markets.1 In a global financial environment, firms from financially underdeveloped economies gain access to mature financial markets, which are liquid and offer long-term financing. This integration also helps to develop the domestic financial systems.2 As a consequence, the cost of capital decreases and financing constraints are relaxed.3 Furthermore, by issuing debt in foreign jurisdictions, with better contract enforcement institutions, the level of risk for creditors decreases and debtors become more able to borrow long term.4 All these potential advantages have prompted most emerging economies to liberalize their financial systems around the first half of the 1990s. The crises that started in the mid 1990s with the Mexican devaluation have, however, raised concerns that globalization increases risks, making emerging economies vulnerable to financial distress. Different risks are usually associated with globalization and crises. A central one is the maturity risk derived from the shortening of the maturity structure, which exposes borrowers to potential rollover difficulties and interest rate fluctuations.5 In fact, short-term debt has played an important role in the crises of Mexico 1994–95, East Asia 1997–98, Russia 1998, and Brazil 1998–99. The higher exposure to risks that globalization may bring about has led many economists to argue that countries should liberalize their financial systems gradually, and that those that have already liberalized might consider imposing some type of capital controls.6 The international finance literature offers different explanations to why globalization might expose emerging economies to maturity risk.7 This literature argues that globalization can increase the maturity risk if it leads to exposure to international investors with information disadvantages, which may choose to lend short term to better monitor and discipline borrowers.8 Also, if international investors were more risk averse than domestic investors, the maturity structure would shift to the short term, as foreign investors would charge borrowers from emerging markets a higher risk premium on long-term issues than domestic investors.9 When short-term lending occurs, abrupt changes in market sentiment may trigger financial crises, as it becomes too costly for countries to roll over maturing debt.10 Though there are different arguments on the impact of globalization on debt maturity, the empirical evidence is still scarce. This paper tries to fill this void by studying the effects of globalization on the debt structure of firms operating in emerging economies. By financial globalization, we mean the integration of countries with the international financial system. This integration is driven by two factors: (i) financial liberalization policies implemented by governments and (ii) the actual use of international financial markets by firms. The focus on debt maturity is interesting because, as discussed above, the literature gives mixed predictions. Some arguments suggest that the maturity structure lengthens with globalization, while others predict a rise in short-term debt. The actual impact on debt remains an empirical question, which is the subject of this paper. We test the effects of globalization by studying the behavior of debt as reported in firms' balance sheets. The use of balance sheets has several advantages. First, firm-level data allow us to examine how firms' access to international markets affects their debt ratios. This is important because not all firms have access to international capital markets, even when governments liberalize the restrictions on the financial system. If markets are segmented and globalization opens new financing opportunities only to some firms, there will be differences in the financial structure of firms with and without access to international markets. Second, firms' balance sheets have received increasing attention because their health is key to achieve financial stability. As Krugman (1999) argues, deteriorated balance sheets can play a crucial role during crises and in their aftermath, as became evident in East Asia.11 Third, aggregate data on the debt maturity of the private sector are not available; so firm-level data are needed to study its maturity structure. To test the effects of globalization on debt structure, we construct a novel data set that enables us to focus on macro and micro issues. We assemble a large panel of 686 non-financial companies located in East Asia and Latin America. We work with seven emerging economies – Argentina, Brazil, Indonesia, Malaysia, Mexico, South Korea, and Thailand – that liberalized their financial systems. We construct long time series, covering the 1980s and 1990s, to be able to include periods characterized both by financial repression and financial liberalization. To test the effect of globalization at the macro level, we use country-level data to determine when countries liberalize their financial systems. Though the main results of the paper are obtained with an indicator of stock market liberalization, we additionally use measures of capital account liberalization and domestic financial sector liberalization. To study the effects of globalization at the micro level, we use the firms' participation in international bond and equity markets. Beyond the globalization effects, we control for information on balance sheets and firms' characteristics, crisis effects, and the level of financial development in the markets in which firms operate. The results show that the effects of globalization on debt structure are significant. In particular, financial liberalization is associated with a shorter maturity structure for the average firm. Interestingly, the effects are not equal across firms. While firms that rely only on domestic financing shorten their maturity structure after liberalization, firms with actual access to international bond and equity markets obtain more long-term debt and extend their maturity structure. Interestingly, the effects are stronger in economies with less developed domestic financial systems. The rest of the paper is organized as follows. Section 2 describes the data. Section 3 presents the methodology and basic results. Section 4 describes the results using a broader definition of financial liberalization. Section 5 shows some alternative estimates. Section 6 concludes with a discussion of the results and directions for future research.

This paper has documented mainly two new facts about the significant effects of financial globalization on firms' debt structure. Contrary to the claims that international financial markets lend relatively short term, firms that access international bond and equity markets experience an increase in long-term debt and a longer maturity structure. On the other hand, domestic-only-financed firms experience a shortening of their maturity structure with financial liberalization. This evidence supports to some extent the arguments that predict a lengthening of the maturity structure with globalization. Moreover, the claims that predict a shortening of the maturity structure with globalization seem to apply just to the firms that rely on the domestic financial sector exclusively. The evidence also indicates that firms from emerging economies with more developed domestic financial systems are less affected by financial liberalization. This implies that relatively developed domestic financial sectors might provide similar financial instruments to the ones obtained abroad, what is particularly important for firms with no access to foreign financing. In light of this finding, if there exist negative effects of financial liberalization, countries with more developed domestic markets should be less concerned about opening up their financial systems. To the extent that financial liberalization yields positive effects, countries with less developed financial sectors may be the ones benefiting the most. While the results in this paper support the arguments that financial globalization has some positive effects on emerging economies (as the participation in international capital markets has a positive impact on long-term debt), they also provide some evidence for caution about the globalization process. First, the results suggest that globalization introduces a wedge between the firms that are able to integrate with the world financial markets and those that rely on the domestic financial system. The former seem able to reduce their financial vulnerability relative to the latter. Second, liberalization does lead to a rise in short-term debt for domestic-only-financed firms, increasing the risk of crises, as these constitute the largest group of firms in emerging economies. Finally, the results seem to provide support to the claims that financial markets are segmented, in the sense that the financing available in domestic markets is different from the one available in the international financial system. Financial underdevelopment probably affects negatively the firms that depend on domestic financing. The new facts reported in this paper leave many questions for future research. One important question is why short-term debt increases for domestic-only-financed firms after financial markets become liberalized. One possible explanation could be related to the new financing available in domestic markets after some firms obtained financing abroad. Due to this extra financing, new firms without previous reputation in credit markets may obtain access to domestic credit markets because of a “crowding in” effect. However, the lack of reputation may lead lenders to extend only short-term debt to these new firms. Another possible explanation could be that domestic financial intermediaries are the ones driving the increase in short-term debt by borrowing abroad short term and channeling those funds domestically.24 Unfortunately, our data do not allow us to distinguish bank debt from other types of debt to answer this question. And the existing literature does not help either, as it does not study whether banks shift the maturity of their lending after liberalization.25 Another interesting topic for future research is why globally financed firms are able to lengthen their maturity structure. Perhaps, access to international equity markets sends a signal of transparency and credit worthiness at the firm level. Or maybe, the participation in international markets just helps companies overcome the difficulties of contracting in developing countries, as accessing better financial institutions, better contractual frameworks, and more liquid markets facilitates long-term borrowing. Future research could also shed light on the other risks that globalization can entail. Regarding the over-borrowing risk, the results suggest that financial liberalization does not seem to lead to higher debt–equity ratios. One possible explanation for this finding is that although debt may have increased substantially, equity financing may have also risen. To better measure the extent of over-borrowing, it would be necessary to analyze more data and other debt indicators. With respect to the exchange rate risk, it would be interesting to know whether globalization affects the debt currency composition, and if so in which direction.