What hinders investment in the aftermath of financial crises? Insolvent firms or illiquid banks

Sebnem Kalemli-Ozcan, Herman Kamil, Carolina Villegas Sanchez

Producció científica: Document de treball

Resum

We quantify the effects of the lending and balance sheet channels on corporate investment, by comparing the performance of foreign-owned exporters to that of domestic during two types of financial crises: currency and twin. Our measure of balance sheet weakness is based on maturity and currency mismatches between assets and liabilities. During a twin crisis, a 1 percent worsening of the balance sheet translates into a 13 percent decline in investment by domestic exporters relative to foreign-owned exporters, while the latter increase investment by 5 percent in spite of the credit crunch. During currency crises their balance-sheet deterioration is similar although no signficant difference in investment rates.
Idioma originalAnglès
Estat de la publicacióPublicada - 1 de nov. 2010

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