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

Author/Editor: Yong Sarah Zhou
Publication Date: January 14, 2013
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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: 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.
Series: Working Paper No. 13/13
Subject(s): Credit | Indonesia | Malaysia | Thailand | Asia | Investment | Emerging markets | Association of Southeast Asian Nations | Cross country analysis

Publication Date: January 14, 2013
ISBN/ISSN: 9781475533736/1018-5941 Format: Paper
Stock No: WPIEA2013013 Pages: 25
US$18.00 (Academic Rate:
US$18.00 )
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