50 Pages Posted: 12 Dec 2016 Last revised: 15 May 2017
Date Written: May 15, 2017
How do emerging market corporates fare during periods of currency depreciation? We find that non-financial firms that issued dollar-denominated bonds for financial reasons are also the firms whose share prices are most vulnerable to local currency depreciation. The results are consistent with the existence of currency mismatches in the balance sheet, with implications for creditworthiness in an environment of depreciating currencies.
Keywords: emerging market corporate debt, currency mismatch, China
JEL Classification: E44, G15
Suggested Citation: Suggested Citation
Bruno, Valentina and Shin, Hyun Song, Currency Depreciation and Emerging Market Corporate Distress (May 15, 2017). Available at SSRN: https://ssrn.com/abstract=2883488 or http://dx.doi.org/10.2139/ssrn.2883488