This paper studies the relation between firm’s financing choices and integration with global financial markets. Using an East Asian and Latin American firm-level panel for the 1980s and 1990s, we study how leverage ratios, debt maturity structure, and sources of financing change when economies are liberalized and when firms access international equity and bond markets. The evidence shows that integration with world financial markets has uneven effects. On the one hand, debt maturity tends to shorten when countries undertake financial liberalization. On the other hand, domestic firms that actually participate in international markets obtain better financing opportunities and extend their debt maturity. Additionally, debt-equity ratios do not increase after financial liberalization. Firms in economies with more developed domestic financial systems are less affected by financial liberalization. Leverage ratios increase during crisis times
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