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Corporate response to distress: evidence from the Asian financial crisis

Mara Faccio () and Rajdeep Sengupta

Review, 2011, vol. 93, issue Mar, 127-154

Abstract: This paper provides a comprehensive examination of corporate responses to financial distress during an economy-wide crisis, specifically through the restructuring of assets (through asset sales, mergers, or liquidations) and/or liabilities. Using firm-level data from five countries hardest hit by the East Asian financial crisis of 1997-98, this study contrasts the effects of financial and corporate governance variables on restructuring choices. The study finds that, during a crisis, financial constraints and corporate governance each have a large effect on the restructuring choice.

Keywords: Corporate governance; Financial crises - Asia (search for similar items in EconPapers)
Date: 2011
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Working Paper: Corporate response to distress: evidence from the Asian financial crisis (2006) Downloads
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Handle: RePEc:fip:fedlrv:y:2011:i:mar:p:127-154:n:v.93no.2