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

  • Yong Sarah Zhou
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    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.

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    Paper provided by International Monetary Fund in its series IMF Working Papers with number 13/13.

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    Length: 25
    Date of creation: 14 Jan 2013
    Date of revision:
    Handle: RePEc:imf:imfwpa:13/13
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