This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Corporate Performance in the East Asian Financial Crisis

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Claessens, Stijn
Djankov, Simeon
Xu, Lixin Colin

Additional information is available for the following registered author(s):

Abstract

The sharp decline in the once-stellar performance of East Asian corporations following the 1997 financial crisis has sparked an intense debate. Some observers argue that external shocks, including a drop in aggregate demand and a shortage of working capital, explain the corporate sector's poor performance. Others assert that the difficulties were apparent well before the crisis and that the risky financial policies pursued by these firms left them vulnerable. A survey of the literature shows little microeconomic evidence to support either view. This article compares the growth and financing patterns of East Asian corporations in the years before the crisis with those in other countries. It finds little microeconomic evidence that corporate growth was weakening but some support for the argument that many firms had a weak financial structure that left them vulnerable to an economic downturn. Based on a sample of more than 850 publicly listed firms in the four crisis countries--Indonesia, Malaysia, the Republic of Korea, and Thailand--and two comparators, Hong Kong (China) and Singapore, it appears that firm-specific weaknesses already in existence before the crisis were important factors in the deteriorating performance of the corporate sector. Copyright 2000 by Oxford University Press.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.worldbank.org/research/journals/wbro/obsfeb00/Article_2.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Article provided by Oxford University Press in its journal World Bank Research Observer.

Volume (Year): 15 (2000)
Issue (Month): 1 (February)
Pages: 23-46
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:oup:wbrobs:v:15:y:2000:i:1:p:23-46

Contact details of provider:
Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
Fax: 01865 267 985
Email:
Web page: http://wbro.oxfordjournals.org/

Order Information:
Web: http://www.oup.co.uk/journals

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Claessens, S. & Djankov, S. & Lang, L.H.P., 1999. "East Asian Corporations. Heroes or Villains?," World Bank - Discussion Papers 409, World Bank.
  2. Laeven, Luc, 1999. "Risk and efficiency in East Asian banks," Policy Research Working Paper Series 2255, The World Bank. [Downloadable!]
  3. Cho, Y.J. & Kim, J.K., 1995. "Credit Policies and the Industrialization of Korea," World Bank - Discussion Papers 286, World Bank.
  4. Oliver Hart, 2000. "Different Approaches to Bankruptcy," NBER Working Papers 7921, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Paul Krugman, 1999. "Balance Sheets, the Transfer Problem, and Financial Crises," International Tax and Public Finance, Springer, vol. 6(4), pages 459-472, November. [Downloadable!] (restricted)
  6. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Governance matters," Policy Research Working Paper Series 2196, The World Bank. [Downloadable!]
  7. Anil K. Kashyap & Jeremy C. Stein, 1994. "Monetary Policy and Bank Lending," NBER Chapters, in: Monetary Policy, pages 221-261 National Bureau of Economic Research, Inc. [Downloadable!]
    Other versions:
  8. Agenor, Pierre-Richard & Aizenman, Joshua, 1999. "Financial sector inefficiencies and coordination failures : implications for crisis management," Policy Research Working Paper Series 2185, The World Bank. [Downloadable!]
  9. Steven Radelet & Jeffrey D. Sachs, 1998. "The East Asian Financial Crisis: Diagnosis, Remedies, Prospects," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1998-1), pages 1-90. [Downloadable!]
  10. Bernanke, Ben & Gertler, Mark, 1995. "Inside the Black Box: The Credit Channel of Monetary Policy Transmission," Working Papers 95-15, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
    Other versions:
  11. Zhaohui Chen & Jorge A. Chan-Lau, 1998. "Financial Crisis and Credit Crunch as a Result of Inefficient Financial Intermediation - with Reference to the Asian Financial Crisis," IMF Working Papers 98/127, International Monetary Fund.
  12. Asli Demirgüç-Kunt & Vojislav Maksimovic, 1998. "Law, Finance, and Firm Growth," Journal of Finance, American Finance Association, vol. 53(6), pages 2107-2137, December. [Downloadable!] (restricted)
  13. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June. [Downloadable!] (restricted)
  14. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert Vishny, 1999. "Investor Protection: Origins, Consequences, Reform," Harvard Institute of Economic Research Working Papers 1883, Harvard - Institute of Economic Research. [Downloadable!]
  15. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December. [Downloadable!] (restricted)
    Other versions:
  16. Reinhart, Carmen & Kaminsky, Graciela, 1999. "The twin crises: The causes of banking and balance of payments problems," MPRA Paper 14081, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  17. Se Jik Kim & Mark R. Stone, 2000. "Corporate Leverage, Bankcruptcy and Output Adjustment in Post-Crisis East Asia," Microeconomics Working Papers 143, East Asian Bureau of Economic Research. [Downloadable!]
  18. Claessens, Stijn & Djankov, Simeon & Klapper, Leora, 1999. "Resolution of corporate distress - evidence from East Asia's financial crisis," Policy Research Working Paper Series 2133, The World Bank. [Downloadable!]
  19. Jorge A. Chan-Lau & Zhaohui Chen, 1998. "Financial Crisis and Credit Crunch as a Result of Inefficient Financial Intermediation—with Reference to the Asian Financial Crisis," International Finance 9804001, EconWPA, revised 24 Apr 1998. [Downloadable!]
  20. Jason Furman & Joseph E. Stiglitz, 1998. "Economic Crises: Evidence and Insights from East Asia," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1998-2), pages 1-136. [Downloadable!]
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Yasuyuki Sawada & Sung Jin Kang, 2004. "Credit Crunches and Household Welfare: The Case of Korean Financial Crisis," Econometric Society 2004 Far Eastern Meetings 751, Econometric Society. [Downloadable!]
  2. Sanjay Basu & Swapnendu Bandyopadhyay (Banerjee), 2005. "Relationship Banking, State Co-Ordination and Long-Term Debt: Reinterpreting the Big Push," Departmental Working Papers wp0502, National University of Singapore, Department of Economics. [Downloadable!]
  3. Prasetyantoko, Agustinus, 2008. "Financing Policies and Firm Vulnerability in Indonesia," MPRA Paper 6533, University Library of Munich, Germany. [Downloadable!]
  4. Feijen, Erik, 2005. "Do incumbents manipulate access to finance during banking crises?," Policy Research Working Paper Series 3660, The World Bank. [Downloadable!]
  5. Sarmistha Pal & Nigel Driffield, 2003. "Do External Funds Yield Lower Returns ? Recent Evidence From East Asian Economies," Finance 0309002, EconWPA, revised 15 Mar 2004. [Downloadable!]
    Other versions:
  6. Driffield, Nigel & Pal, Sarmistha, 2008. "Evolution of Capital Structure in East Asia: Corporate Inertia or Endeavours?," IZA Discussion Papers 3426, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  7. Ramkishen S. Rajan, 2007. "Managing new-style currency crises: the swan diagram approach revisited," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(5), pages 583-606. [Downloadable!]
    Other versions:
  8. DeLisle Worrell, 2004. "Quantitative Assessment of the Financial Sector: An Integrated Approach," IMF Working Papers 04/153, International Monetary Fund. [Downloadable!]
  9. Sun Jin Kang & Yasuyuki Sawada, 2003. "Credit Crunches and Household Welfare: The Case of the Korean Financial Crisis," CIRJE F-Series CIRJE-F-234, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
    Other versions:
  10. Opazo, Luis & Raddatz, Claudio & Schmukler, Sergio L., 2009. "The long and the short of emerging market debt," Policy Research Working Paper Series 5056, The World Bank. [Downloadable!]
  11. Michael P. Dooley & Sujata Verma, 2003. "Rescue Packages and Output Losses Following Crises," NBER Chapters, in: Managing Currency Crises in Emerging Markets, pages 125-186 National Bureau of Economic Research, Inc. [Downloadable!]
    Other versions:
  12. Dionisius Narjoko & Hal Hill, 2006. "Winners and Losers during a Deep Economic Crisis: Firm-level Evidence from Indonesian Manufacturing," Departmental Working Papers 2006-13, Australian National University, Economics RSPAS. [Downloadable!]
    Other versions:
  13. Kang-Kook Lee & James Crotty, 2004. "Was the IMF's Imposition of Economic Regime Change Justified? A Critique of the IMF's Economic and Political Role in Korea During and After the Crisis," Working Papers wp77, Political Economy Research Institute, University of Massachusetts at Amherst. [Downloadable!]
  14. Stijn Claessens & Daniela Klingebiel & Luc Laeven, 2001. "Financial Restructuring in Banking and Corporate Sector Crises: What Policies to Pursue?," NBER Working Papers 8386, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  15. Andre Santos & Jorge A. Chan-Lau, 2006. "Currency Mismatches and Corporate Default Risk: Modeling, Measurement, and Surveillance Applications," IMF Working Papers 06/269, International Monetary Fund. [Downloadable!]
  16. Gavin C. Reid & Julia A. Smith, 2005. "Realities of Long-Term Post Investment Performance for Venture-Backed Enterprises," CRIEFF Discussion Papers 0503, Centre for Research into Industry, Enterprise, Finance and the Firm. [Downloadable!]
  17. Agustinus, Prasetyantoko, 2007. "Foreign Ownership and Firm Financing Constraint in Indonesia," MPRA Paper 6500, University Library of Munich, Germany. [Downloadable!]
  18. J. Piesse & Yougesh Khatri & Luc Leruth, 2002. "Corporate Performance and Governance in Malaysia," IMF Working Papers 02/152, International Monetary Fund. [Downloadable!]
  19. Sanghoon Lee, 2008. "Ownership Structure and Financial Performance: Evidence from Panel Data of South Korea," Working Paper Series, Department of Economics, University of Utah 2008_17, University of Utah, Department of Economics. [Downloadable!]
  20. Karen Watkins, 2006. "Crisis Anticipation at a Micro-Level: Mexico 1995-1996," Frontiers in Finance and Economics, Lille Graduate School of Management, vol. 3(1), pages 79-102, June. [Downloadable!]
Statistics
Access and download statistics

Did you know? IDEAS was sponsored from 1997 to 2002 by the Université du Québec à Montréal.

This page was last updated on 2009-11-6.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.