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The role of bond finance in firms' survival during the Asian crisis

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  • Marina-Eliza Spaliara

    ()
    (Dept of Economics, Loughborough University)

  • Serafeim Tsoukas

    ()
    (Dept of Economics, Nottingham University)

Abstract

In this paper we assess the effects of bond financing on firms' survival during the 1997-98 Asian crisis. Using a novel database covering the period 1995 to 2007 for five Asian economies most affected by the crisis - Indonesia, Korea, Malaysia, Singapore and Thailand - we find strong evidence that the Asian crisis affected both directly and indirectly (through interactions with financial indicators) the probability of survival. More importantly, we show that bond issuers, irrespective of the currency denomination, are more likely to survive compared to non-issuers. Nevertheless, only firms issuing bonds in local currency are shielded from the adverse effects of the crisis.

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Paper provided by Department of Economics, Loughborough University in its series Discussion Paper Series with number 2009_17.

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Date of creation: Nov 2009
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Handle: RePEc:lbo:lbowps:2009_17

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