BANKING REFORM AND THE FINANCING OF FIRM INVESTMENT - AN EMPIRICAL-ANALYSIS OF THE CHILEAN EXPERIENCE, 1983-92

This article investigates whether the Chilean banking reforms of the 1 980s have contributed to reducing market imperfections in Chilean fina ncial markets in the late 1980 and early 1990s. To analyse this issue, patterns of investment and its finance for different types of firms a re studied, based on balance sheet information of a panel of 70 firms. The most important conclusion is that those specific reforms, aimed a t reducing intra-conglomerate lending, seem to have been successful, s ince access of non-conglomerate firms has increased, indicating a redu ction of existing market imperfections for such firms.