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Bestseller
BestsellerE-book
Author Chung, Jae-Yong, author, (IMF staff)

Title Benefits and costs of coporate debt restructuring : an estimation for Korea / prepared by Jae Chung and Lev Ratnovski.

Publication Info. [Washington, D.C.] : International Monetary Fund, [2016]
©2016

Item Status

Description 1 online resource (22 pages) : color illustrations.
data file
Series IMF working paper, 1018-5941 ; WP/16/204
IMF working paper ; WP/16/204.
Note "October 2016."
At head of title: International Monetary Fund, Asia and Pacific Department.
Bibliography Includes bibliographical references (pages 20-21).
Summary The paper offers a method to quantify benefits and costs of corporate debt restructuring, with an application to Korea. We suggest a "persistent ICR<1" criterion to capture firms that had ICR<1 for multiple consecutive years and thus will likely require restructuring. We assess the benefits of debt restructuring by estimating the effects of removing a firm's debt overhang on its investment and hiring decisions. We refine the assumptions on the cost of debt restructuring based on the literature, and focus not only on creditor losses, but also on the employment impact of corporate restructuring. Benchmark results for Korea suggest 5.5-7.5 percent of GDP creditor losses and a 0.4-0.9 percent of the labor force employment impact from the debt restructuring. These are compensated by a permanent 0.4-0.9 percentage points increase in future GDP growth thanks to higher corporate investment and 0.05-0.1 percent of labor force higher hiring in the subsequent years. The key qualitative result is that corporate debt restructurings "pay off" in the medium term: their economic cost is recouped over about 10 years
Local Note eBooks on EBSCOhost EBSCO eBook Subscription Academic Collection - North America
Subject Corporate debt -- Korea (South) -- Econometric models.
Corporate debt.
Korea (South)
Econometric models.
Debt relief -- Korea (South) -- Econometric models.
Debt relief.
Genre/Form Electronic books.
Added Author Ratnovski, Lev, author, (IMF staff)
International Monetary Fund, publisher.
International Monetary Fund. Asia and Pacific Department, issuing body.
Other Form: Print version: Chung, Jae. Benefits and Costs of Corporate Debt Restructuring: An Estimation for Korea. Washington, D.C. : International Monetary Fund,2016 9781475545418
ISBN 9781475545418
147554541X
147554555X
9781475545555 (electronic book)
1475545509
Standard No. 10.5089/9781475545418.001