Corporate financial structures in developing countries

Notwithstanding the setback of the 1980s in Latin America and Africa, viewed in a long-term perspective, the developing countries have achieved an impressive degree of industrialization during the last four decades. Since 1950, these economies collectively have recorede fast rates of industrial growth and an appreciable increase in their share of world manufacturing production. Significantly, a group of third world nations - the so called newly industrializing countries (NICS) have managed during this period to create an industrial and scientific infrastructure, as well as to train a pool of manpower and build management skills to a level that has made them important competitors on a wide range of products in the industrial country markets themselves. The chief reason fo0r the paucity of studies on corporate finance in less developed countries (LDVs) has been the lack of suitable data on a standardized, comparative inter-company basis. However, with the emergence and development of stock markets in a number of developing countries in recent years, more information on company accounts has become available. Although these accounts are very far from being perfect in terms of either their quality or coverage, in view of the importance of the subject, the Economics Department of the International Finance Corporation (IFC) decided in September 1989 that it would be useful to launch a research project to systematically study corporate finance in the LDCs. This paper reports on the first phase of that research. September 1989 that it would be useful to launch a research project to systematically study coporate finance in the LDCs. This paper reports on the first phase of that research.