Corporate Financial Structure and Financial Stability
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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. 2004/124
Subject:
Bank credit Banking crises Currency crises Emerging and frontier financial markets Financial crises Financial markets Money
English
Publication Date:
July 1, 2004
ISBN/ISSN:
9781451854756/1018-5941
Stock No:
WPIEA1242004
Pages:
49
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