Financial crisis and credit crunch in Korea: Evidence from firm-level data

Eduardo Borensztein, Jong Wha Lee

Research output: Contribution to journalArticlepeer-review

57 Citations (Scopus)

Abstract

This paper analyzes the credit crunch following the recent financial crisis in Korea. Using enterprise-level data, we find that there were big differences in the magnitude of the credit contraction across different types of firms. In particular, chaebol (conglomerate)-affiliated firms appeared to have lost the preferential access to credit that they had enjoyed in the pre-crisis period, and credit appeared to have been reallocated in favor of more efficient firms. This suggests that the credit crunch suffered by certain sectors can be attributed to the adjustment by banks and enterprises to the restructuring of the financial sector, rather than tight monetary policy or an external credit constraint.

Original languageEnglish
Pages (from-to)853-875
Number of pages23
JournalJournal of Monetary Economics
Volume49
Issue number4
DOIs
Publication statusPublished - 2002

Keywords

  • Credit crunch
  • Financial crisis
  • Korea

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

Fingerprint Dive into the research topics of 'Financial crisis and credit crunch in Korea: Evidence from firm-level data'. Together they form a unique fingerprint.

Cite this