Foreign currency borrowing, exports and firm performance: evidence from a currency crisis
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 su...
| Main Authors: | , , , , |
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| Format: | Article |
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Taylor & Francis
2018
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| Online Access: | https://eprints.nottingham.ac.uk/48843/ |
| _version_ | 1848797861491245056 |
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| author | Bougheas, Spiros Lim, Hosung Mateut, Simona Mizen, Paul Yalcin, Cihan |
| author_facet | Bougheas, Spiros Lim, Hosung Mateut, Simona Mizen, Paul Yalcin, Cihan |
| author_sort | Bougheas, Spiros |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | 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. |
| first_indexed | 2025-11-14T20:10:36Z |
| format | Article |
| id | nottingham-48843 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| last_indexed | 2025-11-14T20:10:36Z |
| publishDate | 2018 |
| publisher | Taylor & Francis |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-488432020-05-04T19:26:13Z https://eprints.nottingham.ac.uk/48843/ Foreign currency borrowing, exports and firm performance: evidence from a currency crisis Bougheas, Spiros Lim, Hosung Mateut, Simona Mizen, Paul Yalcin, Cihan 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. Taylor & Francis 2018-01-11 Article PeerReviewed Bougheas, Spiros, Lim, Hosung, Mateut, Simona, Mizen, Paul and Yalcin, Cihan (2018) Foreign currency borrowing, exports and firm performance: evidence from a currency crisis. European Journal of Finance, 24 (17). pp. 1649-16671. ISSN 1466-4364 currency crisis; exports; foreign currency borrowing http://www.tandfonline.com/eprint/gchwXgP9MM4FVUTneBXK/full doi:10.1080/1351847X.2017.1421246 doi:10.1080/1351847X.2017.1421246 |
| spellingShingle | currency crisis; exports; foreign currency borrowing Bougheas, Spiros Lim, Hosung Mateut, Simona Mizen, Paul Yalcin, Cihan Foreign currency borrowing, exports and firm performance: evidence from a currency crisis |
| title | Foreign currency borrowing, exports and firm performance:
evidence from a currency crisis |
| title_full | Foreign currency borrowing, exports and firm performance:
evidence from a currency crisis |
| title_fullStr | Foreign currency borrowing, exports and firm performance:
evidence from a currency crisis |
| title_full_unstemmed | Foreign currency borrowing, exports and firm performance:
evidence from a currency crisis |
| title_short | Foreign currency borrowing, exports and firm performance:
evidence from a currency crisis |
| title_sort | foreign currency borrowing, exports and firm performance:
evidence from a currency crisis |
| topic | currency crisis; exports; foreign currency borrowing |
| url | https://eprints.nottingham.ac.uk/48843/ https://eprints.nottingham.ac.uk/48843/ https://eprints.nottingham.ac.uk/48843/ |