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Macroeconomic Crisis and Individual Firm Performance: The Mexican Experience

Author

Listed:
  • Karen Watkins

    () (Faculty of Economics, Erasmus Universiteit Rotterdam)

  • Dick van Dijk

    () (Faculty of Economics, Erasmus Universiteit Rotterdam)

  • Jaap Spronk

    () (Faculty of Economics, Erasmus Universiteit Rotterdam)

Abstract

This paper considers financial, operational, solvency, and performance ratios, in order to detect when there were balance sheets’ variations related to the 1994 Mexican currency crisis. Quarterly results for 88 non-financial Mexican companies that survived the crisis are used, and tests for structural change are performed. Findings show that generally firms’ balance sheets deteriorated between the fourth quarters of 1993 and 1995, which points the possibility of corporate roots of the macroeconomic crisis. Although in most cases firms’ balance sheets improved after the crisis, the recovery was partial and gradual, and overall this episode was prejudicial even for surviving companies.

Suggested Citation

  • Karen Watkins & Dick van Dijk & Jaap Spronk, 2004. "Macroeconomic Crisis and Individual Firm Performance: The Mexican Experience," Tinbergen Institute Discussion Papers 04-057/2, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20040057
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    File URL: http://papers.tinbergen.nl/04057.pdf
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    References listed on IDEAS

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    Cited by:

    1. Karen Watkins & Dick Van Dijk & Jaap Spronk, 2006. "Corporate Governance and Performance during the Aftermath of the 1994 Mexican Crisis," EconoQuantum, Revista de Economia y Negocios, Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia., vol. 2(2), pages 35-48, Enero-Jun.

    More about this item

    Keywords

    financial crisis; firm-level data;

    JEL classification:

    • F3 - International Economics - - International Finance
    • G0 - Financial Economics - - General
    • G3 - Financial Economics - - Corporate Finance and Governance

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