Corporate Restructuring and Its Macro Effects

January 27, 2017

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Format: Chicago

Jongsoon Shin. Corporate Restructuring and Its Macro Effects, (USA: International Monetary Fund, 2017) accessed September 18, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper describes issues in Korea’s corporate sector, the need for restructuring, and the authorities’ initiatives and challenges. It then identifies lessons from other countries’ experience and conducts an econometric analysis based on cross-country aggregate data, compared with previous studies which mostly use firm-level data. This analysis finds that restructuring episodes, while sometimes challenging in the short term, have typically been associated with more rapid economic growth afterward. Corporate restructuring could have a negative effect on the labor and the financial markets in the short term, but is associated with positive growth through increased investment and capital productivity in the medium term, outpacing the negative effects.

Subject: Asset and liability management, Banking, Capital productivity, Creditor bail-in, Debt restructuring, Financial crises, Financial regulation and supervision, Production, Public debt

Keywords: Bank, Capital productivity, Corporate, Corporate debt, Creditor bail-in, Debt, Debt restructuring, Debt restructuring, Debt-distressed firm, Firm, Firm structuring, Global, Investment, Macro effects, Restructuring, Restructuring dummy, Shipping firm, Unemployment, WP

Publication Details

Pages:

26
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2017/017
Stock No:

WPIEA2017017
ISBN:

9781475572438
ISSN:

1018-5941

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