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Investment during the Korean financial crisis: A structural econometric approach

Author

Listed:
  • Jae Sim

    (Boston University)

  • Simon Gilchrist

    (Boston University and NBER)

Abstract
Although our estimates suggest that foreign-denominated debt had relatively little effect on aggregate investment spending for the Korean economy during this crisis episode, counterfactual experiments imply sizeable contractions in investment through this mechanism for economies that are more heavily dependent on foreign-denominated debt.

Suggested Citation

  • Jae Sim & Simon Gilchrist, 2007. "Investment during the Korean financial crisis: A structural econometric approach," 2007 Meeting Papers 53, Society for Economic Dynamics.
    • Handle: RePEc:red:sed007:53
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    Cited by:

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    2. Scott L. Fulford & Felipe Schwartzman, 2013. "The credibility of exchange rate pegs and bank distress in historical perspective: lessons from the national banking era," Working Paper 13-18, Federal Reserve Bank of Richmond.
    3. Stjepan Srhoj & Bruno Škrinjarić & Sonja Radas, 2021. "Bidding against the odds? The impact evaluation of grants for young micro and small firms during the recession," Small Business Economics, Springer, vol. 56(1), pages 83-103, January.
    4. Endrész, Marianna & Harasztosi, Péter, 2014. "Corporate foreign currency borrowing and investment: The case of Hungary," Emerging Markets Review, Elsevier, vol. 21(C), pages 265-287.
    5. Juliana Salomao & Liliana Varela, 2022. "Exchange Rate Exposure and Firm Dynamics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(1), pages 481-514.
    6. Emil Verner & Győző Gyöngyösi, 2020. "Household Debt Revaluation and the Real Economy: Evidence from a Foreign Currency Debt Crisis," American Economic Review, American Economic Association, vol. 110(9), pages 2667-2702, September.
    7. Kim, Yun Jung & Tesar, Linda L. & Zhang, Jing, 2015. "The impact of foreign liabilities on small firms: Firm-level evidence from the Korean crisis," Journal of International Economics, Elsevier, vol. 97(2), pages 209-230.
    8. François Gourio & Jianjun Miao, 2010. "Firm Heterogeneity and the Long-Run Effects of Dividend Tax Reform," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(1), pages 131-168, January.
    9. Uluc Aysun, 2012. "Capital Flows, Maturity Mismatches, and Profitability in Emerging Markets: Evidence From Bank Level Data," Journal of Developing Areas, Tennessee State University, College of Business, vol. 46(1), pages 211-239, January-J.
    10. Virgiliu Midrigan & Daniel Yi Xu, 2014. "Finance and Misallocation: Evidence from Plant-Level Data," American Economic Review, American Economic Association, vol. 104(2), pages 422-458, February.
    11. Caballero, Julián, 2021. "Corporate dollar debt and depreciations: All’s well that ends well?," Journal of Banking & Finance, Elsevier, vol. 130(C).
    12. Mariann Endrész & Gyõzõ Gyöngyösi & Péter Harasztosi, 2012. "Currency mismatch and the sub-prime crisis: firm-level stylised facts from Hungary," MNB Working Papers 2012/8, Magyar Nemzeti Bank (Central Bank of Hungary).
    13. Kim, Yun Jung, 2016. "Foreign currency exposure and balance sheet effects: A firm-level analysis for Korea," Emerging Markets Review, Elsevier, vol. 26(C), pages 64-79.
    14. Hardy, Bryan, 2023. "Foreign currency borrowing, balance sheet shocks, and real outcomes," Journal of International Money and Finance, Elsevier, vol. 139(C).
    15. Liliana Varela & Juliana Salomao, 2016. "Exchange Rate Exposure and Firm Dynamics," Working Papers 2016-278-05, Department of Economics, University of Houston.
    16. Brei, Michael & Charpe, Matthieu, 2012. "Currency depreciations, financial transfers, and firm heterogeneity," Emerging Markets Review, Elsevier, vol. 13(1), pages 26-41.
    17. Bryan Hardy & Felipe Saffie, 2019. "From carry trades to trade credit: financial intermediation by non-financial corporations," BIS Working Papers 773, Bank for International Settlements.
    18. Shesadri Banerjee & M S Mohanty, 2021. "US monetary policy and the financial channel of the exchange rate: evidence from India," BIS Working Papers 945, Bank for International Settlements.
    19. Mehtap Kesriyeli & Erdal Ozmen & Serkan Yiğit, 2011. "Corporate sector liability dollarization and exchange rate balance sheet effect in Turkey," Applied Economics, Taylor & Francis Journals, vol. 43(30), pages 4741-4747.
    20. Vitezić Vanja & Srhoj Stjepan & Perić Marko, 2018. "Investigating Industry Dynamics in a Recessionary Transition Economy," South East European Journal of Economics and Business, Sciendo, vol. 13(1), pages 43-67, June.

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