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Foreign Currency Borrowing, Exports and Firm Performance: Evidence from a Currency Crisis

Spiros Bougheas, Hosung Lim, Simona Mateut, Paul Mizen and Cihan Yalcin

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: This paper develops a simple signalling model of foreign currency borrowing that yields predictions about firm survival and performance during a currency crisis. Using a large panel of firm level data for South Korea we offer empirical support for the predictions of our model. It demonstrates that although firms that borrow in foreign currency are more likely to exit after the currency collapses, those that survive perform better. Among them, the best performers are exporters whose foreign sales are now more competitive.

Keywords: Currency crisis; Exports; Foreign currency borrowing (search for similar items in EconPapers)
JEL-codes: F34 F41 G21 L25 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-bec, nep-int and nep-opm
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Citations: View citations in EconPapers (3)

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https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN ... g+Paperss/2018/18-01 (application/pdf)

Related works:
Journal Article: Foreign currency borrowing, exports and firm performance: evidence from a currency crisis (2018) Downloads
Working Paper: Foreign Currency Borrowing, Exports and Firm Performance: Evidence from a Currency Crisis (2016) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:tcb:wpaper:1801

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