Determinants and Effects of Countries’ External Capital Structure: A Firm-Level Analysis
IMF Working Papers, February 18, 2022
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- Determinants and Effects of Countries’ External Capital Structure: A Firm-Level Analysis
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Bibliographic details
- Authors: Uroš Herman, Tobias Krahnke
- Published: February 18, 2022
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400200984.001
Authors and Publication
- By Uroš Herman, Tobias Krahnke
- February 18, 2022
- IMF Working Papers, Working Paper No. 2022/038, Issue: 038, Volume: 2022
- Pages: 40
- DOI: https://doi.org/10.5089/9798400200984.001
- Stock No: WPIEA2022038
- ISBN: 9798400200984
- ISSN: 1018-5941
- Citation (example format provided on page): Uroš Herman, and Tobias Krahnke. "Determinants and Effects of Countries’ External Capital Structure: A Firm-Level Analysis", IMF Working Papers 2022, 038 (2022), accessed 9/3/2026, https://doi.org/10.5089/9798400200984.001
Research Question and Scope
- Investigates whether a firm’s composition of foreign liabilities matters for firm resilience during economic turmoil.
- Examines which firm characteristics determine foreign capital structure.
- Uses firm-level data to assess links between foreign liability composition and outcomes during the global financial crisis of 2008-2009.
Key Findings
- The composition of foreign liabilities matters for a country’s susceptibility to external shocks; firm-level evidence corroborates prior international macroeconomic findings.
- Firms with a positive equity share in their foreign liabilities:
- Were less affected by the global financial crisis.
- Were less likely to default in the aftermath of the crisis.
- Larger, more open, and more productive firms tend to have a higher equity share in total foreign liabilities.
Subjects and Keywords
- Subjects: Balance of payments, Corporate sector, Economic sectors, External position, Financial crises, Foreign corporations, Foreign direct investment, Foreign liabilities, Global financial crisis of 2008-2009
- Keywords: Corporate sector, equity share, External Liabilities, Financial Crisis, firm-level data, Firm-level data, firm's composition, Foreign corporations, Foreign direct investment, Foreign Direct Investment, Foreign liabilities, Global, Global financial crisis of 2008-2009, sales growth, standard deviation
Implications (inferred from findings presented)
- Equity composition of foreign liabilities is associated with greater firm resilience during systemic crises.
- Firm characteristics—size, openness, productivity—are important determinants of foreign liability equity share, with potential implications for country-level external vulnerability assessments and policy aimed at strengthening corporate balance sheets.
Source: IMF Working Paper — "Determinants and Effects of Countries’ External Capital Structure: A Firm-Level Analysis", Uroš Herman and Tobias Krahnke, February 18, 2022.
Content in this bundle
- Working Paper