THE IMPACTS OF FINANCIAL LIBERALIZATION ON THE FINANCING STRUCTURE OF FIRMS

Currently firms have the possibility to choose between different financial resources provided by capital markets or banking market, financial system and national economic and financial phenomena generated by large-scale (financial liberalization, financial innovation). The aim of this study is to examine the relation between the financial liberalization and firms' financing choices (also known as financial structure). In literature, empirical studies have analyzed the following aspects: the choice between equity and debt financing; the maturity structure of debt financing, and the choice between internal and external financing. The liberalization of the domestic financial sector might create new financing opportunities for a closed economy. On the other hand, in times of financial instability, financial liberalization may affect the firms' financial structure.