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Explaining ASEAN-3’s Investment Puzzle A Tale of Two Sectors

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  • Yong Sarah Zhou

Abstract

The prolonged investment decline in post-Asian crisis emerging Asia, in contrast to the swift recovery of economic growth, has remained a puzzle. This paper shows that the post-crisis investment recession has been mainly concentrated in the nontradable sector, and hypothesizes that the slowdown is because firms operating in that sector are financially constrained. Empirical results based on macro and firm-level data from Indonesia, Malaysia, and Thailand (ASEAN-3) support this hypothesis.

Suggested Citation

  • Yong Sarah Zhou, 2013. "Explaining ASEAN-3’s Investment Puzzle A Tale of Two Sectors," IMF Working Papers 2013/013, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2013/013
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    Cited by:

    1. Günay, Hüseyin & Kılınç, Mustafa, 2015. "Credit market imperfections and business cycle asymmetries in Turkey," Journal of Empirical Finance, Elsevier, vol. 34(C), pages 79-98.

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