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Currency Mismatches in Non-Financial Firms in Chile

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  • Kevin Cowan L.
  • Erwin Hansen S.
  • Luis Óscar Herrera B.

Abstract

Using a new data base that includes the currency composition of assets and liabilities of non-financial firms, this paper examines the effects and determinants of currency mismatches in Chile. In line with previous studies, we find that after a depreciation in real terms, firms with the largest debt in dollars perform no worse than their counterparts indebted in pesos. Nonetheless, once we control properly by differences across firms in the currency composition of their assets, income and use of derivatives, significant balance sheet effects arise.

Suggested Citation

  • Kevin Cowan L. & Erwin Hansen S. & Luis Óscar Herrera B., 2005. "Currency Mismatches in Non-Financial Firms in Chile," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 8(2), pages 57-82, August.
    • Handle: RePEc:chb:bcchec:v:8:y:2005:i:2:p:57-82
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    References listed on IDEAS

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    Cited by:

    1. Martin Brown & Steven Ongena & Pinar Yeşin, 2014. "Information Asymmetry and Foreign Currency Borrowing by Small Firms," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 56(1), pages 110-131, March.
    2. Mehtap Kesriyeli & Erdal Ozmen & Serkan Yigit, 2005. "Corporate Sector Debt Composition and Exchange Rate Balance Sheet Effect in Turkey," Working Papers 0516, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.

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