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Corporate Restructuring and Its Macro Effects

Author

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  • Mr. Jongsoon Shin

Abstract

This paper describes issues in Korea’s corporate sector, the need for restructuring, and the authorities’ initiatives and challenges. It then identifies lessons from other countries’ experience and conducts an econometric analysis based on cross-country aggregate data, compared with previous studies which mostly use firm-level data. This analysis finds that restructuring episodes, while sometimes challenging in the short term, have typically been associated with more rapid economic growth afterward. Corporate restructuring could have a negative effect on the labor and the financial markets in the short term, but is associated with positive growth through increased investment and capital productivity in the medium term, outpacing the negative effects.

Suggested Citation

  • Mr. Jongsoon Shin, 2017. "Corporate Restructuring and Its Macro Effects," IMF Working Papers 2017/017, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:2017/017
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    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=44597
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    Cited by:

    1. Ana Martinis & Igor Ljubaj, 2017. "Corporate Debt Overhang in Croatia: Micro Assessment and Macro Implications," Working Papers 51, The Croatian National Bank, Croatia.
    2. Choi Hyelin & Jung Chun & Kim Subin, 2018. "The Effect of Restructuring on Labor Reallocation and Productivity Growth: An Estimation for Korea," Working Papers id:12429, eSocialSciences.

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