Role of Debt Maturity Structure on Firm Fixed Assets During Sudden Stop Episodes: Evidence from Thailand

 
Author/Editor: Iannariello, Maria Pia ; Morsy, Hanan ; Terada-Hagiwara, Akiko
 
Publication Date: January 01, 2007
 
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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.
 
Series: Working Paper No. 07/11
Subject(s): Financial crisis | Thailand | Private sector | Capital | Debt burden | Debt management | Asia

Author's Keyword(s): Firm fixed asset | sudden stops | Thailand | short-term debt maturity structure | Asia financial crisis
 
English
Publication Date: January 01, 2007
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA2007011 Pages: 27
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
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