IMF Working Papers

Corporate Insolvency Procedures and Bank Behavior: A Study of Selected Asian Economies

By Qaizar Hussain, Clas Wihlborg

October 1, 1999

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Qaizar Hussain, and Clas Wihlborg. Corporate Insolvency Procedures and Bank Behavior: A Study of Selected Asian Economies, (USA: International Monetary Fund, 1999) accessed November 21, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper explores insolvency and debt recovery procedures, and political, legal, and institutional factors influencing financial decisions of corporations and banks during pre-crisis years in six Asian economies. It also examines whether these factors may have contributed to the depth and duration of the 1997 crisis. There are two key findings: First, bank behavior and other institutional factors, and not the nature of stakeholder orientation, seem to explain variations in capital structures and the depth of recessions across economies. Second, aspects of insolvency procedures favoring rehabilitation of “financially distressed” firms seem to explain well the expected duration of the crisis.

Subject: Banking, Corporate insolvency, Corruption, Crime, Economic growth, Economic recession, Financial crises, Financial institutions, Financial markets, Financial sector policy and analysis, Nonperforming loans, Solvency, Stock markets

Keywords: Asian crisis, Aspects of Insolvency procedure, Bank behavior, Bankruptcy, Capital structure, Corporate governance structure, Corporate insolvency, Corruption, Cost of capital, Crisis economy, Cross-economy relationship, Debt recovery procedure, Debtor company, Description of Insolvency procedure, Distressed firm, Economic recession, Economy characteristic, Economy crisis, Economy difference, Exchange rate, Firm performance, Global, Insolvency procedure, Insolvency procedures, Legal system characteristic, Nonperforming loans, Rank correlations, Recovery procedure, Shareholder concentration, Short-term debt, Solvency, Stock markets, WP

Publication Details

  • Pages:

    46

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1999/135

  • Stock No:

    WPIEA1351999

  • ISBN:

    9781451931310

  • ISSN:

    1018-5941