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Corporate failures and the denomination of corporate bonds: Evidence from emerging Asian economies over two financial crises

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  • Spaliara, Marina-Eliza
  • Tsoukas, Serafeim

Abstract

Using a novel financial data-set which covers an extensive time period between 1995 to 2012, we test for the impact of currency denomination of bonds on Asian firms’ survival probabilities. Our data span two financial crises: the 1997–98 Asian crisis and the 2007–09 global financial crisis. We find that during the former crisis firms with foreign currency denominated bonds face a higher probability of failure compared to firms with domestic bonds. On the other extreme, we find no notable differences between the 2007–09 financial crisis and tranquil times for both domestic and foreign issuers.

Suggested Citation

  • Spaliara, Marina-Eliza & Tsoukas, Serafeim, 2017. "Corporate failures and the denomination of corporate bonds: Evidence from emerging Asian economies over two financial crises," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 46(C), pages 84-97.
  • Handle: RePEc:eee:intfin:v:46:y:2017:i:c:p:84-97
    DOI: 10.1016/j.intfin.2016.08.005
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    References listed on IDEAS

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    More about this item

    Keywords

    Firm survival; Bond financing; Domestic and foreign currency debt; Financial crises;

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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