Journal Article

Corporate response to distress: evidence from the Asian financial crisis

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;

Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Review

Publication Date: 2011

Volume: 93

Issue: Mar

Pages: 127-154