This paper studies whether firm’s financing choices are different in bank-based and
market-based systems. Using firms from emerging economies, we analyze how leverage ratios, debt maturity structure, and sources of financing are related to firm-specific characteristics and how they change when firms integrate with world markets. We find similar results for bank-based and market-based economies. Firms’characteristics affect financing choices in ways consistent with the existing literature. Debt maturity tends to
shorten when countries undertake financial liberalization. Domestic firms that actually
participate in international markets obtain better financing opportunities and extend their
debt maturity. Additionally, we analyze in detail the previously unstudied case of Argentina, a bank-based country, which experienced a sharp financial liberalization and was hit hard by all recent global crises.