Corporate Insolvency Procedures and Bank Behavior: A Study of Selected Asian Economies

46 Pages Posted: 13 Feb 2006

See all articles by Qaizar Hussain

Qaizar Hussain

International Monetary Fund (IMF)

Clas Wihlborg

Chapman University; University West

Date Written: October 1999

Abstract

This paper explores insolvency and debt recovery procedures, and political, legal, and institutional factors influencing financial decisions of corporations and banks during pre-crisis years in six Asian economies. It also examines whether these factors may have contributed to the depth and duration of the 1997 crisis. There are two key findings: First, bank behavior and other institutional factors, and not the nature of stakeholder orientation, seem to explain variations in capital structures and the depth of recessions across economies. Second, aspects of insolvency procedures favoring rehabilitation of financially distressed firms seem to explain well the expected duration of the crisis.

Keywords: Insolvency procedures, Bankruptcy, Capital structure, Shareholder concentration, Firm performance, Asian crisis

JEL Classification: G32, G33, K40, P52

Suggested Citation

Hussain, Qaizar and Wihlborg, Clas, Corporate Insolvency Procedures and Bank Behavior: A Study of Selected Asian Economies (October 1999). IMF Working Paper No. 99/135, Available at SSRN: https://ssrn.com/abstract=880662

Qaizar Hussain (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Clas Wihlborg

Chapman University ( email )

333 N. Glassell
Orange, CA 92866
United States
+17147447630 (Phone)

University West ( email )

Trollhättan, 46186
Sweden

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