ABSTRACT
The foundations of the neoconservative model were two central structural policies: the opening to international trade and the liberalization of domestic capital markets and the opening-up to external financial markets. This chapter focuses on the impact these two major structural changes had on the industrial sector. It provides a general description of the policies used to open the economy to international trade. The chapter presents the methodology used to quantify the relative impact of the opening-up process on the manufacturing sector. It analyzes the impact of the financial liberalization process on manufacturing firms. The chapter also focuses on the financial behavior of bankrupt firms. It also presents a statistical appendix which explains the sources and methodology used to construct the statistical series. This method is an extension of the Chenery model, and allows identification and quantification of the relative contribution to gross output of three effects: changes in domestic demand, changes in exports, and changes in import substitution.
