Role of Debt Maturity Structureon Firm Fixed Assets During Sudden Stop Episodes: Evidence From Thailand
IMF Working Papers, January 1, 2007
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- Role of Debt Maturity Structureon Firm Fixed Assets During Sudden Stop Episodes: Evidence From Thailand
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Bibliographic details
- Authors: Hanan Morsy, Maria Pia Iannariello, Akiko Terada-Hagiwara
- Published: January 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451865752.001
Core finding
- The growth of Thai firms' fixed assets experienced severe declines starting in 1996.
- Holding longer-term debt maturity structure mitigates adverse effects on firms' fixed-asset growth during sudden stop episodes.
- In tranquil periods, firm profitability is the primary factor associated with fixed-asset growth.
Data and scope
- Sample: balance sheet data for 284 nonfinancial Thai listed firms.
- Focus: fixed assets adjustment undertaken by firms at times of financial constraints (sudden stops).
Empirical approach
- Regression analysis controlling for firms' characteristics and lagged dependent variables.
- Examination of interactions between debt maturity structure, profitability, and sudden stop episodes.
Key implications and interpretations
- Debt maturity structure matters for firm resilience during financial crises:
- Longer-term debt maturity structure works in firms' favor during sudden stop episodes.
- Different determinants across regimes:
- Profitability is the dominant factor for fixed-asset growth during tranquil periods.
- Policy-relevant insight:
- Strengthening access to longer-term financing or encouraging longer debt maturity profiles can help firms better preserve and adjust fixed assets when facing sudden stops.
Subjects and keywords (as listed in source)
- Subjects: 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.
Source: IMF Working Paper — "Role of Debt Maturity Structureon Firm Fixed Assets During Sudden Stop Episodes: Evidence From Thailand" (authors: Hanan Morsy, Maria Pia Iannariello, Akiko Terada-Hagiwara).