The Role of Bond Finance in Firms’ Survival During the Asian Crisis
Loughborough University - Faculty of Social Sciences and Humanities
University of Glasgow
February 28, 2010
HKIMR Working Paper No. 03/2010
In this paper we assess the effects of bond financing on firms' survival during the 1997-98 Asian crisis. Using a novel database covering the period 1995 to 2007 for five Asian economies most affected by the crisis - Indonesia, Korea, Malaysia, Singapore and Thailand - we find strong evidence that the Asian crisis affected both directly and indirectly (through interactions with financial indicators) the probability of survival. More importantly, we show that bond issuers, irrespective of the currency denomination, are more likely to survive compared to non-issuers. Nevertheless, only firms issuing bonds in local currency are shielded from the adverse effects of the crisis.
Number of Pages in PDF File: 30
Keywords: Bond Financing, Financial Crisis, Firm Survival, East Asia
JEL Classification: F32, F34, G15, L20working papers series
Date posted: June 22, 2010
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