Role of Debt Maturity Structureon Firm Fixed Assets During Sudden Stop Episodes: Evidence From Thailand
January 1, 2007
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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.
Subject: Balance of payments, Capital inflows, Consumption, Economic sectors, Financial statements, National accounts, Public financial management (PFM), Sudden stops, Transnational corporations
Keywords: Asia financial crisis, balance sheet, Capital inflows, characteristics variable, Consumption, Financial statements, firm, Firm fixed asset, firm level, fixed asset growth, fixed assets adjustment, Global, nontradable firm, output firm, Short-term debt maturity structure, Structureon firm fixed assets, Sudden Stops, Thailand, Transnational corporations, WP
Pages:
27
Volume:
2007
DOI:
Issue:
011
Series:
Working Paper No. 2007/011
Stock No:
WPIEA2007011
ISBN:
9781451865752
ISSN:
1018-5941
