Financial Crisis and Credit Crunch in Korea : Evidence From Firm-Level Data

Author/Editor:

Jong-Wha Lee ; Eduardo Borensztein

Publication Date:

January 1, 2000

Electronic Access:

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Summary:

This paper analyzes the credit crunch following the recent financial crisis in Korea. Using enterprise-level data, we find that there were big differences in the magnitude of the credit contraction across different types of firms. In particular, chaebol (conglomerate)-affiliated firms appeared to have lost the preferential access to credit they enjoyed in the pre-crisis period, and credit appears to have been reallocated in favor of more efficient firms. This suggests that the credit crunch suffered by certain sectors can be attributed to the adjustment by banks and enterprises to the restructuring of the financial sector, rather than to tight monetary policy or an external credit constraint.

Series:

Working Paper No. 00/25

Subject:

English

Publication Date:

January 1, 2000

ISBN/ISSN:

9781451844252/1018-5941

Stock No:

WPIEA0252000

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

28

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