Impact of the normalization of monetary policy on the access FED to credit of Latin American firms

Authors

DOI:

https://doi.org/10.17981/econcuc.42.1.2021.Econ.3

Keywords:

External financing, Corporate finance, Regulation, Financial competition

Abstract

The financing of companies (internal or external) is what enhances the productive fabric of the countries, so then, this research aims to estimate the impact of the normalization of the monetary policy of the United States Federal Reserve on the access to credit of Latin American companies. A discrete choice model is implemented on a longitudinal panel for 25 thousand firms in 12 countries between 2010 and 2017. Various internal and external variables are introduced for the firms. Additionally, variables on the banking structure of the countries, the variation of national interest rates and the FED are included. The results show that the most relevant determinants of access to credit are the internal characteristics of the firms. On the other hand, the change in the monetary policy of the Federal Reserve was not significant in the estimates. Additionally, it was found that higher levels of competition in the financial sector reduce the amount of internal funds used by companies to finance the firm's productive activity by 12%.

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Author Biography

Héctor Alberto Botello Peñaloza

He is a Master in Economic Sciences. National university of Colombia. Researcher for the territorial planning group (GIDROT). Industrial University of Santander. Review interest Development, Business Competitiveness and Monetary Policy.

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Published

2020-10-12

How to Cite

Botello Peñaloza, H. A. (2020). Impact of the normalization of monetary policy on the access FED to credit of Latin American firms. ECONÓMICAS CUC, 42(1), 34–53. https://doi.org/10.17981/econcuc.42.1.2021.Econ.3

Issue

Vol. 42 No. 1 (2021)

Section

Articles: Economy and Finance

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