Effects of Foreign-Currency Debt on Non-Financial Latin American Firms: Evidence from the 2000s
This paper empirically tests the effects of foreign currency debt on economic performance and investment behavior in non-financial firms in six Latin America and Caribbean countries. It is found find that domestic-currency depreciations may surprisingly increase the exchange-rate induced profits of particularly highly foreign currency-indebted firms (especially those that are foreign owned and others with foreign links). Such depreciations have only a mild correlation with gross profits. Foreign-currency debt seems to have ambiguous effects on fixed investment purchases behavior, possibly attributable to non-financial firms' behavior as financial intermediaries. This effect tends to vanish when financial derivatives are considered.
Main Author: | |
---|---|
Other Authors: | |
Format: | Technical Notes biblioteca |
Language: | English |
Published: |
Inter-American Development Bank
|
Subjects: | Foreign Currency Debt, Firm Performance, Financial Bond, Interest Rate, Corporate Debt, Risk Management, Foreign Exchange, F34 - International Lending and Debt Problems, G32 - Financing Policy • Financial Risk and Risk Management • Capital and Ownership Structure • Value of Firms • Goodwill, credit constraints;commodity exporters;foreign currency debt;firm performance, |
Online Access: | http://dx.doi.org/10.18235/0009316 https://publications.iadb.org/en/effects-foreign-currency-debt-non-financial-latin-american-firms-evidence-2000s |
Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
id |
dig-bid-node-12620 |
---|---|
record_format |
koha |
spelling |
dig-bid-node-126202024-05-30T20:12:52ZEffects of Foreign-Currency Debt on Non-Financial Latin American Firms: Evidence from the 2000s 2016-12-09T00:00:00+0000 http://dx.doi.org/10.18235/0009316 https://publications.iadb.org/en/effects-foreign-currency-debt-non-financial-latin-american-firms-evidence-2000s Inter-American Development Bank Foreign Currency Debt Firm Performance Financial Bond Interest Rate Corporate Debt Risk Management Foreign Exchange F34 - International Lending and Debt Problems G32 - Financing Policy • Financial Risk and Risk Management • Capital and Ownership Structure • Value of Firms • Goodwill credit constraints;commodity exporters;foreign currency debt;firm performance This paper empirically tests the effects of foreign currency debt on economic performance and investment behavior in non-financial firms in six Latin America and Caribbean countries. It is found find that domestic-currency depreciations may surprisingly increase the exchange-rate induced profits of particularly highly foreign currency-indebted firms (especially those that are foreign owned and others with foreign links). Such depreciations have only a mild correlation with gross profits. Foreign-currency debt seems to have ambiguous effects on fixed investment purchases behavior, possibly attributable to non-financial firms' behavior as financial intermediaries. This effect tends to vanish when financial derivatives are considered. Inter-American Development Bank Javier García-Cicco Enrique Kawamura Technical Notes application/pdf IDB Publications Mexico Colombia Chile Brazil Argentina Peru Latin America en |
institution |
BID |
collection |
DSpace |
country |
Estados Unidos |
countrycode |
US |
component |
Bibliográfico |
access |
En linea |
databasecode |
dig-bid |
tag |
biblioteca |
region |
America del Norte |
libraryname |
Biblioteca Felipe Herrera del BID |
language |
English |
topic |
Foreign Currency Debt Firm Performance Financial Bond Interest Rate Corporate Debt Risk Management Foreign Exchange F34 - International Lending and Debt Problems G32 - Financing Policy • Financial Risk and Risk Management • Capital and Ownership Structure • Value of Firms • Goodwill credit constraints;commodity exporters;foreign currency debt;firm performance Foreign Currency Debt Firm Performance Financial Bond Interest Rate Corporate Debt Risk Management Foreign Exchange F34 - International Lending and Debt Problems G32 - Financing Policy • Financial Risk and Risk Management • Capital and Ownership Structure • Value of Firms • Goodwill credit constraints;commodity exporters;foreign currency debt;firm performance |
spellingShingle |
Foreign Currency Debt Firm Performance Financial Bond Interest Rate Corporate Debt Risk Management Foreign Exchange F34 - International Lending and Debt Problems G32 - Financing Policy • Financial Risk and Risk Management • Capital and Ownership Structure • Value of Firms • Goodwill credit constraints;commodity exporters;foreign currency debt;firm performance Foreign Currency Debt Firm Performance Financial Bond Interest Rate Corporate Debt Risk Management Foreign Exchange F34 - International Lending and Debt Problems G32 - Financing Policy • Financial Risk and Risk Management • Capital and Ownership Structure • Value of Firms • Goodwill credit constraints;commodity exporters;foreign currency debt;firm performance Inter-American Development Bank Effects of Foreign-Currency Debt on Non-Financial Latin American Firms: Evidence from the 2000s |
description |
This paper empirically tests the effects of foreign currency debt on economic performance and investment behavior in non-financial firms in six Latin America and Caribbean countries. It is found find that domestic-currency depreciations may surprisingly increase the exchange-rate induced profits of particularly highly foreign currency-indebted firms (especially those that are foreign owned and others with foreign links). Such depreciations have only a mild correlation with gross profits. Foreign-currency debt seems to have ambiguous effects on fixed investment purchases behavior, possibly attributable to non-financial firms' behavior as financial intermediaries. This effect tends to vanish when financial derivatives are considered. |
author2 |
Javier García-Cicco |
author_facet |
Javier García-Cicco Inter-American Development Bank |
format |
Technical Notes |
topic_facet |
Foreign Currency Debt Firm Performance Financial Bond Interest Rate Corporate Debt Risk Management Foreign Exchange F34 - International Lending and Debt Problems G32 - Financing Policy • Financial Risk and Risk Management • Capital and Ownership Structure • Value of Firms • Goodwill credit constraints;commodity exporters;foreign currency debt;firm performance |
author |
Inter-American Development Bank |
author_sort |
Inter-American Development Bank |
title |
Effects of Foreign-Currency Debt on Non-Financial Latin American Firms: Evidence from the 2000s |
title_short |
Effects of Foreign-Currency Debt on Non-Financial Latin American Firms: Evidence from the 2000s |
title_full |
Effects of Foreign-Currency Debt on Non-Financial Latin American Firms: Evidence from the 2000s |
title_fullStr |
Effects of Foreign-Currency Debt on Non-Financial Latin American Firms: Evidence from the 2000s |
title_full_unstemmed |
Effects of Foreign-Currency Debt on Non-Financial Latin American Firms: Evidence from the 2000s |
title_sort |
effects of foreign-currency debt on non-financial latin american firms: evidence from the 2000s |
publisher |
Inter-American Development Bank |
url |
http://dx.doi.org/10.18235/0009316 https://publications.iadb.org/en/effects-foreign-currency-debt-non-financial-latin-american-firms-evidence-2000s |
work_keys_str_mv |
AT interamericandevelopmentbank effectsofforeigncurrencydebtonnonfinanciallatinamericanfirmsevidencefromthe2000s |
_version_ |
1806237171669008384 |