Sources of Corporate Financing And Economic Crisis in Korea

Youngjae Lim

in Governance, Regulation, and Privatization in the Asia-Pacific Region

Published by University of Chicago Press

Published in print March 2004 | ISBN: 9780226386799
Published online February 2013 | e-ISBN: 9780226386966 | DOI:
Sources of Corporate Financing And Economic Crisis in Korea

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This chapter uses a firm-level data set in Korea during the 1992–2000 period to examine the dynamic patterns in the allocation of credit across firms. The 1997 economic crisis in Korea shifted the allocation of credit across large and small firms. After the crisis, large firms, to some extent, left banks and turned to the capital market for financing, while profitable small firms gained more access to credit from financial institutions. The improved lending practices of banks contributed at least partially to this shift in bank credit from large firms to small firms. A commentary is also included at the end of the chapter.

Keywords: Korean economic crisis; credit allocation; banks; lending; large firms; small firms; financing

Chapter.  6757 words.  Illustrated.

Subjects: Business and Management

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