Role of Debt Maturity Structureon Firm Fixed Assets During Sudden Stop Episodes: Evidence From Thailand

By Hanan Morsy, Maria Pia Iannariello, Akiko Terada-Hagiwara

January 1, 2007

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Hanan Morsy, Maria Pia Iannariello, and Akiko Terada-Hagiwara. Role of Debt Maturity Structureon Firm Fixed Assets During Sudden Stop Episodes: Evidence From Thailand, (USA: International Monetary Fund, 2007) accessed September 18, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper studies the detrimental effect of sudden stops on the growth of Thai firms' fixed assets. We focus on the fixed assets adjustment that firms undertake at times of financial constraints. We derive our results from balance sheet data for 284 nonfinancial Thai listed firms. Our data demonstrate that Thai firms faced severe declines in the growth of their fixed assets starting in 1996. Regression results demonstrate, after controlling for firms' characteristics and lagged dependent variables, that holding longer-term debt maturity structure is the factor that works in the firms' favor during sudden stop episodes, while it is their profitability that matters during tranquil periods.

Subject: Balance of payments, Capital inflows, Consumption, Economic sectors, Financial statements, National accounts, Public financial management (PFM), Sudden stops, Transnational corporations

Keywords: Asia financial crisis, Balance sheet, Capital inflows, Characteristics variable, Consumption, Financial statements, Firm, Firm fixed asset, Firm level, Fixed asset growth, Fixed assets adjustment, Global, Nontradable firm, Output firm, Short-term debt maturity structure, Structureon firm fixed assets, Sudden Stops, Thailand, Transnational corporations, WP

Publication Details

Pages:

27
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2007/011
Stock No:

WPIEA2007011
ISBN:

9781451865752
ISSN:

1018-5941

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