Role of Debt Maturity Structureon Firm Fixed Assets During Sudden Stop Episodes: Evidence From Thailand

Hanan Morsy, Maria Pia Iannariello and Akiko Terada-Hagiwara

No 2007/011, IMF Working Papers from International Monetary Fund

Abstract: This paper studies the detrimental effect of sudden stops on the growth of Thai firms' fixed assets. We focus on the fixed assets adjustment that firms undertake at times of financial constraints. We derive our results from balance sheet data for 284 nonfinancial Thai listed firms. Our data demonstrate that Thai firms faced severe declines in the growth of their fixed assets starting in 1996. Regression results demonstrate, after controlling for firms' characteristics and lagged dependent variables, that holding longer-term debt maturity structure is the factor that works in the firms' favor during sudden stop episodes, while it is their profitability that matters during tranquil periods.

Keywords: WP; firm; nontradable firm; balance sheet; fixed asset growth; Firm fixed asset; Sudden Stops; Thailand; Short-term debt maturity structure; Asia financial crisis; characteristics variable; fixed assets adjustment; Structureon firm fixed assets; output firm; firm level; Financial statements; Capital inflows; Consumption; Transnational corporations; Global (search for similar items in EconPapers)
Pages: 27
Date: 2007-01-01
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Citations: View citations in EconPapers (4)

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