Corporate Restructuring and Its Macro Effects
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Summary:
This paper describes issues in Korea’s corporate sector, the need for restructuring, and the authorities’ initiatives and challenges. It then identifies lessons from other countries’ experience and conducts an econometric analysis based on cross-country aggregate data, compared with previous studies which mostly use firm-level data. This analysis finds that restructuring episodes, while sometimes challenging in the short term, have typically been associated with more rapid economic growth afterward. Corporate restructuring could have a negative effect on the labor and the financial markets in the short term, but is associated with positive growth through increased investment and capital productivity in the medium term, outpacing the negative effects.
Series:
Working Paper No. 2017/017
Subject:
Asset and liability management Banking Capital productivity Creditor bail-in Debt restructuring Financial crises Financial regulation and supervision Production Public debt
English
Publication Date:
January 27, 2017
ISBN/ISSN:
9781475572438/1018-5941
Stock No:
WPIEA2017017
Pages:
26
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