Credit Allocation and Financial Crisis in Korea
February 1, 1999
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Summary
This paper analyzes some of the structural problems associated with the Korean financial sector, and investigates whether the financial system has allocated credit in an efficient way over the past three decades. Using data for 32 manufacturing sectors, we find no evidence that credit flows were directed to the relatively more profitable sectors, either before or after the financial reforms. We also find that the flow of credits did not contribute to improve the economic performance of the favored industries over time.
Subject: Bank credit, Credit, Economic sectors, External debt, Financial institutions, Financial sector, Loans, Money
Keywords: accounting profit, Bank credit, chaebol firm, Credit, credit allocation, credit availability, credit guarantee funds, credit policy, curb market rate, debt ratio, East Asia, Financial Crisis, Financial Markets, Financial sector, firm, foreign currency, loan, loan market, Loans, market share, profit rate, short-term debt, WP
Pages:
37
Volume:
1999
DOI:
Issue:
020
Series:
Working Paper No. 1999/020
Stock No:
WPIEA0201999
ISBN:
9781451843828
ISSN:
1018-5941
