Financial Crisis and Credit Crunch in Korea: Evidence From Firm-Level Data

Jong-Wha Lee and Eduardo Borensztein

No 2000/025, IMF Working Papers from International Monetary Fund

Abstract: This paper analyzes the credit crunch following the recent financial crisis in Korea. Using enterprise-level data, we find that there were big differences in the magnitude of the credit contraction across different types of firms. In particular, chaebol (conglomerate)-affiliated firms appeared to have lost the preferential access to credit they enjoyed in the pre-crisis period, and credit appears to have been reallocated in favor of more efficient firms. This suggests that the credit crunch suffered by certain sectors can be attributed to the adjustment by banks and enterprises to the restructuring of the financial sector, rather than to tight monetary policy or an external credit constraint.

Keywords: WP; credit crunch; profit; profit rate; Korea; financial crisis; credit contraction; flight to quality; bank credit variable; overnight rate; tightening credit condition; short-term debt; credit allocation; Credit; Bank credit; Loans; Real interest rates (search for similar items in EconPapers)
Pages: 28
Date: 2000-01-01
References: Add references at CitEc
Citations: View citations in EconPapers (25)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=3432 (application/pdf)

Related works:
Journal Article: Financial crisis and credit crunch in Korea: evidence from firm-level data (2002)
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:imf:imfwpa:2000/025

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().