Didier, Tatiana

Person:
Didier, Tatiana

Office of the Chief Economist, Latin America and Caribbean, World Bank

Fields of Specialization

International finance and development, Emerging market macroeconomics and finance, Latin America, Globalization

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Office of the Chief Economist, Latin America and Caribbean, World Bank

Last updated: September 30, 2024

Biography

Tatiana Didier is a Senior Economist in the World Bank’s Office of the Chief Economist for Latin America and the Caribbean. She obtained a Ph.D. in Economics from MIT in 2008. She has published in the area of international economics. She is currently doing research on international trade and finance, One area of interest is the dynamics of trade and capital flows and the implications for economic growth and development. She is also doing research on the international finance more specifically with a focus on international capital flows, the role of institutional investors, financial crises, and their implications for the development of domestic financial systems.

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Publication Search Results

Now showing 1 - 10 of 37

Boosting SME Finance for Growth: The Case for More Effective Support Policies
(Washington, DC: World Bank, 2024-09-30) Carvajal, Ana Fiorella; Didier, Tatiana
This report offers strategic and actionable guidance to policymakers in strengthening their access to finance policies for small and medium enterprises (SMEs). This report emphasizes the need to improve the enabling environment for SME debt and equity financing. It outlines a roadmap of eight key actions to guide policymakers in achieving this. While such reforms are necessary, they are often insufficient to fully address SME financing constraints. Targeted financial programs thus remain essential to bridge the financing gaps effectively. This report outlines seven actions to improve the design and implementation of these interventions to maximize their impact and the effective use of public funding. This report also underscores the importance of a tailored approach to address the distinct challenges faced by specific SME segments, particularly those of women-owned (and led) SMEs, SMEs in agriculture, SMEs in fragile and conflict-affected states, and those seeking financing for climate change adaptation and mitigation.
Unleashing Productivity through Firm Financing
(Washington, DC: World Bank, 2024-09-30) Didier, Tatiana; Cusolito, Ana Paula
The ability of firms to finance investments in physical and human capital and innovate through digital, green, and other technologies is central to productivity and economic growth. Yet a myriad of distortions and frictions can prevent the efficient allocation of financial resources to firms, negatively impacting their growth and productivity. Drawing from a newly constructed Orbis data set for 2.5 million private firms, Unleashing Productivity through Firm Financing shows that misallocation of finance stifles aggregate productivity. This volume focuses on the links among firm financing, financial constraints, and firm performance, using comprehensive and underexploited firm-level data for emerging market and developing economies. This work explores both the effects of firms’ access to finance and the composition of finance (equity versus debt) on firm performance. It also provides a novel, quantitative assessment of the extent of constraints in debt and equity financing for private firms of different sizes and the impact of such constraints on aggregate growth and productivity. The findings provide robust analytical underpinnings for existing, practical knowledge in supporting access to finance for small and medium-sized enterprises in emerging market and developing economies.
Capital Market Financing and Firm Growth
(World Bank, Washington, DC, 2020-07) Levine, Ross; Didier, Tatiana; Llovet Montanes, Ruth; Schmukler, Sergio L.
This paper studies whether there is a connection between finance and growth at the firm level. It employs a new dataset of 150,165 equity and bond issuances around the world, matched with income and balance sheet data for 62,653 listed firms in 65 countries over 1990-2016. Three main patterns emerge from the analyses. First, firms that choose to issue in capital markets use the funds raised to grow by enhancing their productive capabilities, increasing their tangible and intangible capital and the number of employees. Growth accelerates as firms raise funds. Second, the faster growth is more pronounced among firms that are more likely to face tighter financing constraints, namely, small, young, and high-R&D firms. Third, capital market issuances are associated with faster growth among firms located in countries with more developed capital markets relative to banks. Capital markets are also comparatively effective at allowing financially constrained firms to raise capital.
Bilateral International Investments: The Big Sur?
(World Bank, Washington, DC, 2020-12) Broner, Fernando; Didier, Tatiana; Schmukler, Sergio L.; von Peter, Goetz
Using country-to-country data, this paper documents a set of novel stylized facts about the rise of the South in global finance. The paper assembles comprehensive bilateral data on cross-border bank loans and deposits, portfolio investment in debt and equity, foreign direct investment, and international reserves. The main finding is that global financial integration with and especially within the South (countries outside the G7 and Western Europe) has grown faster than within the North. By 2018, the South accounted for 24 to 40 percent of international loans and deposits, portfolio investment, and foreign direct investment, an increase of roughly 10 percentage points since 2001. The growing importance of the South is reflected in the intensive and extensive margins, with fast growth in the number of bilateral links. Although China weighs heavily in these trends, international investment in the rest of the South has increased to a similar extent.
Financing Firms in Hibernation During the COVID-19 Pandemic
(World Bank, Washington, DC, 2020-04-13) Huneeus, Federico; Didier, Tatiana; Larrain, Mauricio; Schmukler, Sergio L.
The coronavirus (COVID-19) pandemic has imposed a heavy toll on economies worldwide, nearly halting economic activity. Although most firms should be viable when economic activity resumes, cash flows have collapsed, possibly triggering inefficient bankruptcies with long-term detrimental effects. Firms' valuable relationships with workers, suppliers, customers, governments, and creditors could be broken. Hibernation could slow the economy until the pandemic is brought under control and preserve those vital relationships for a quicker recovery. If all stakeholdersshare the burden of economic inactivity, firms are more likely to survive. Financing could help cover firms' reduced operational costs until the pandemic subdues. But financial systems are not well equipped to handle this type of exogenous and synchronized systemic shock. Governments could work with the financial sector to keep firms afloat, enabling forbearance as needed and absorbing part of the firms' increased credit risk, by implementing policies with proper incentives to keep firms viable.
Financing Firms in Hibernation during the COVID-19 Pandemic
(World Bank, Washington, DC, 2020-05) Huneeus, Federico; Didier, Tatiana; Larrain, Mauricio; Schmukler, Sergio L.
The coronavirus (COVID-19) pandemic has halted economic activity worldwide, hurting firms and pushing them toward bankruptcy. This paper provides a unified framework to organize the policy debate related to firm financing during the downturn, centered along four main points. First, the economic crisis triggered by the spread of the virus is radically different from past crises, with important consequences for optimal policy responses. Second, to avoid inefficient bankruptcies and long-term detrimental effects, it is important to preserve firms' relationships with key stakeholders, like workers, suppliers, customers, and creditors. Third, firms can benefit from "hibernating," using the minimum bare cash necessary to withstand the pandemic, while using credit to remain alive until the crisis subdues. Fourth, the existing legal and regulatory infrastructure is ill-equipped to deal with an exogenous systemic shock such as this pandemic. Financial sector policies can help increase the provision of credit, while posing difficult choices and trade-offs.
Global Corporate Debt during Crises: Implications of Switching Borrowing across Markets
(World Bank, Washington, DC, 2020-02) Cortina, Juan J.; Didier, Tatiana; Schmukler, Sergio L.
This paper studies how crises prompted firms to switch borrowing across markets, impacting the amount borrowed, maturity, and currency denomination at the firm and aggregate levels. Using data on worldwide debt issuance from advanced and emerging economies, the paper shows that firms shifted their issuances between domestic and international syndicated loans and corporate bonds during financial crises. Firms reduced their borrowing in shock-hit markets but increased it in other debt markets. Firms also moved toward longer-term markets, maintaining (or even increasing) their borrowing maturity. As they moved toward domestic markets during international crises, firms reduced the share of foreign currency debt. The opposite occurred during domestic crises. Large firms were the ones that switched between international and domestic markets, affecting aggregate capital raising activity. The analysis of four distinct markets generates patterns consistent with credit supply shocks that are different from those obtained when studying the dynamics of individual markets.
Capital Allocation in Developing Countries
(World Bank, Washington, DC, 2019-10) David, Joel M.; Venkateswaran, Venky; Cusolito, Ana Paula; Didier, Tatiana
This paper investigates the sources of capital misallocation across a group of 11 developing and developed countries. The main findings are (i) technological frictions, namely, adjustment costs and uncertainty, account for only a modest share of observed misallocation, leaving ample scope for other factors; (ii) heterogeneity in firm-level technologies potentially explains between one-quarter and one-half; but (iii) dispersion in markups is much smaller; and (iv) after accounting for these factors, on average, at least 50 percent of misallocation within each of these countries remains unexplained, suggesting a large role for additional, potentially distortionary factors. These factors are largely attributable to a component that is correlated with firm size/productivity and one that is essentially permanent to the firm. The paper reports a broad set of moments describing firm-level investment dynamics and detailed parameter estimates on a country-by-country basis, with an eye toward future work in this area.
Latin America and the Rising South: Changing World, Changing Priorities
(Washington, DC: World Bank, 2015-05-19) de la Torre, Augusto; Didier, Tatiana; Ize, Alain; Lederman, Daniel; Schmukler, Sergio L.
The world economy is not what it used to be twenty years ago. For most of the 20th century, the world economy was characterized by developed (North) countries acting as 'center' to a 'periphery' of developing (South) countries. However, the recent rise of developing economies suggests the need to go beyond this North-South dichotomy. This tectonic re-configuration of the global landscape has brought about significant changes to countries in the Latin America and Caribbean (LAC) region. The time is ripe for an in-depth analysis of the dynamics and nature of LAC's external connections. This latest volume in the World Bank Latin American and Caribbean Studies series will focus on the implications of these trends for the economic development of LAC countries. In particular, trade, financial, macroeconomic, and sectoral shifts, as well as labor-market aspects will be systematically analyzed.
Corporate Debt Maturity in Developing Countries: Sources of Long- and Short-Termism
(World Bank, Washington, DC, 2017-10) Cortina, Juan J.; Didier, Tatiana; Schmukler, Sergio L.
This paper documents to what extent firms from developing countries borrow short versus long term, using data on corporate bond and syndicated loan markets. Contrary to claims in the literature based on firm balance sheets, firms from developing countries borrow through bonds and syndicated loans at maturities similar to those obtained by developed country firms. The composition and use of financing matters. Firms from developing countries borrow shorter term in domestic bond markets, but the differences in international issuances (accounting for most of the proceeds) are significantly smaller. Developing country firms borrow longer term in syndicated loan markets, which they partially use for infrastructure projects. However, only large firms from developing countries (similar in size to those from developed ones) issue bonds and syndicated loans. The short-termism in developing countries is partly explained by a lower proportion of firms using these markets, with more firms relying on other shorter-term instruments.