The asymmetric impact of financing restrictions in Argentina: Comparison by sector, size and origin of capital (1995-2003)

Abstract

This paper analyzes the evolution and differential scope of financing restrictions in companies surveyed by the Large Companies Survey (ENGE) of INDEC, for the period 1995-2003. The main objective of the study is to differentiate the results not only by company size, but also by sector of activity and origin of capital. Among the most relevant findings is the existence of financing restrictions that mainly affected smaller companies, in the industrial sector and with controlling shareholders of national origin. These companies have a poorly leveraged financial structure, with a strong presence of non-financial liabilities, short-term debt, high implicit interest rates, significant accumulation of liquid assets, erratic or non-existent dividend policy, and a sensitive propensity to self-finance the investment. At the other extreme, larger companies, from the mining, extractive or service sectors (with predominantly foreign share of capital) seem to have been the least affected by financing restrictions.

JEL classification: E22 ; E44 ; E51