Sources of Corporate Financing and Economic Crisis in Korea: A Micro-evidence
Using the firm-level data set, this paper attempts to examine the dynamic patterns in the allocation of credit across firms in Korea. Supposedly, in Korea, the economic crisis in 1997 had a significant impact on the pattern in the allocation of credit across firms. In particular, this paper aims to examine these dynamic patterns in the allocation of credit across large and small firms after the crisis. The paper suggests that large firms, to some extent, are leaving banks and going to the capital market for their financing after the crisis. The paper also suggests that profitable small firms are gaining easier access to credit by financial institutions after the crisis. There has been a shift in the allocation of bank credit from large firms to small firms. Is this shift due to lendersâ€™ choice or due to borrowersâ€™ changed incentives? The paper suggests that the improved lending practices of banks, at least partially, contributed to this shift of bank credit from large firms to small firms
|Date of creation:||11 Aug 2004|
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