{
  "title": "Financial Liberalization, Credit Constraints, and Collateral: Investment in the Mexican Manufacturing Sector",
  "publication": "IMF Working Papers, March 1, 1999",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/financial-liberalization-credit-constraints-and-collateral-investment-in-the-mexican-2896",
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  "summary": "This paper examines the impact of financial liberalization on fixed investment in Mexico, using establishment-level data from the manufacturing sector.",
  "sections": [
    {
      "heading": "Summary and purpose",
      "content": "- Examines the impact of financial liberalization on fixed investment in Mexico using establishment-level data from the manufacturing sector.\n- Analyzes changes in cash-flow sensitivities.\n- Uses an innovative approach to explore the role of real estate as collateral and to address a potential censoring problem.\n- Provides microeconomic evidence consistent with the role attributed to “financial accelerator” mechanisms during lending booms and during recessions that stem from financial crises."
    },
    {
      "heading": "Key findings",
      "content": "- Financial constraints were eased for small firms but not for large ones.\n- Banks’ reliance on collateral in their lending operations increased the importance of real estate.\n- Results are consistent with financial accelerator mechanisms operating during lending booms and during recessions that stem from financial crises."
    },
    {
      "heading": "Methodology and empirical approach",
      "content": "- Uses establishment-level panel data from the manufacturing sector.\n- Analyzes changes in cash-flow sensitivities to assess shifts in credit constraints.\n- Employs an innovative technique to measure the role of real estate as collateral and to deal with a potential censoring problem (details in the full paper)."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Collateral, Credit, Currencies, Econometric analysis, Estimation techniques, Financial crises, Financial institutions, Money\n- Keywords: capital stock, cash flow, collateral, collaterizable net worth, cost of capital, Credit, credit rationing, Currencies, establishment level, Estimation techniques, exporting firm, financial constraints, financial situation, firm level, fixed-effects tobit, investment, investment project, lending booms, panel data, real estate, single-establishment firm, WP\n\n---\n\n Content in this bundle\n\n- wp9925\n  - wp9925 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp9925 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/financial-liberalization-credit-constraints-and-collateral-investment-in-the-mexican-2896"
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    "Authors: Gaston Gelos, Alejandro M. Werner",
    "Published: March 1, 1999",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451844245.001",
    "Examines the impact of financial liberalization on fixed investment in Mexico using establishment-level data from the manufacturing sector.",
    "Analyzes changes in cash-flow sensitivities.",
    "Uses an innovative approach to explore the role of real estate as collateral and to address a potential censoring problem.",
    "Provides microeconomic evidence consistent with the role attributed to “financial accelerator” mechanisms during lending booms and during recessions that stem from financial crises.",
    "Financial constraints were eased for small firms but not for large ones.",
    "Banks’ reliance on collateral in their lending operations increased the importance of real estate.",
    "Results are consistent with financial accelerator mechanisms operating during lending booms and during recessions that stem from financial crises.",
    "Uses establishment-level panel data from the manufacturing sector.",
    "Analyzes changes in cash-flow sensitivities to assess shifts in credit constraints.",
    "Employs an innovative technique to measure the role of real estate as collateral and to deal with a potential censoring problem (details in the full paper).",
    "Subject: Collateral, Credit, Currencies, Econometric analysis, Estimation techniques, Financial crises, Financial institutions, Money",
    "Keywords: capital stock, cash flow, collateral, collaterizable net worth, cost of capital, Credit, credit rationing, Currencies, establishment level, Estimation techniques, exporting firm, financial constraints, financial situation, firm level, fixed-effects tobit, investment, investment project, lending booms, panel data, real estate, single-establishment firm, WP",
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