Foreign currency borrowing, exports and firm performance: evidence from a currency crisis

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

The European Journal of Finance, 2018, vol. 24, issue 17, 1649-1671

Abstract: This paper develops a simple signaling 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 many of the predictions of our model, while others support predictions that cannot be tested using our data. Our paper demonstrates that although firms that borrow in foreign currency are more likely to exit after the currency collapses, those that continue to produce perform better. Among them, the best performers are exporters whose foreign sales are more competitively priced under a devalued currency.

Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1080/1351847X.2017.1421246 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Foreign Currency Borrowing, Exports and Firm Performance: Evidence from a Currency Crisis (2018)
Working Paper: Foreign Currency Borrowing, Exports and Firm Performance: Evidence from a Currency Crisis (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:eurjfi:v:24:y:2018:i:17:p:1649-1671

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/REJF20

DOI: 10.1080/1351847X.2017.1421246

Access Statistics for this article

The European Journal of Finance is currently edited by Chris Adcock

More articles in The European Journal of Finance from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst (chris.longhurst@tandf.co.uk).