Title

Can We Learn From Lessons of the Past? A Closer Examination of the Corporate Policy Response of Asian Firms Around the Asian Financial Crisis

Author First name, Last name, Institution

Jin Young Yang, Zayed University
Reuben Segara, University of Sydney

ORCID Identifiers

0000-0002-5515-2875

Document Type

Article

Source of Publication

SSRN

Publication Date

2020

Abstract

Using a sample of firms from 8 East Asian countries, we document the corporate policy (cash holding, investment, financing, and payout) response to the Asian Financial Crisis of 1997-1998. Following the crisis, we find significant evidence of a build-up of cash holdings, a fall in capital spending, decreases in sourcing funds from capital markets, and a reduction in dividend payout offset with an increase in the use of repurchases. Our results suggest that such corporate policies used by Asian firms were designed to improve their financial strength by increasing financial flexibility.

Disciplines

Business

Keywords

Asian Financial Crisis, Emerging countries, Financing constraints, Cash reserve policy, Investment decisions, Financing decisions, Payout policy

Indexed in Scopus

no

Open Access

no

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