Corporate Responses to Currency Depreciations: Evidence from Indonesia

Agustinus, Prasetyantoko (2007): Corporate Responses to Currency Depreciations: Evidence from Indonesia.

Abstract

This paper examines the impact of macro fluctuation on firm’s balance sheet to understand firm’s net worth as well as the corporate distress probability. We argue that debt policies could be pro-cyclical, since it enhances corporate distress risk when currency depreciation comes.

• Item Type: MPRA Paper
• Language: English
• Keywords: currency depreciation, firm performance, debt ratio
• Subjects: D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory; F - International Economics > F3 - International Finance > F34 - International Lending and Debt Problems; G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill

References

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