Corporate Financial Structure and Financial Stability

Author/Editor:

Mark R. Stone ; E. P. Davis

Publication Date:

July 1, 2004

Electronic Access:

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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 uses flow-of-funds and balance sheet data to analyze the impact of financial crises on corporate financing and GDP in a range of countries. Post-crisis GDP contractions are mainly accounted for by declines in investment and inventory and are more severe for emerging market countries. Post-crisis investment and inventory declines are correlated with the corporate debtequity ratio. Although companies in emerging market countries hold more liquidity, this is not sufficient to prevent a greater response of expenditures to shocks. Industrial countries appear to benefit from an offsetting increase in bond issuance.

Series:

Working Paper No. 04/124

Subject:

English

Publication Date:

July 1, 2004

ISBN/ISSN:

9781451854756/1018-5941

Stock No:

WPIEA1242004

Format:

Paper

Pages:

49

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