Which Emerging Markets and Developing Economies Face Corporate Balance Sheet Vulnerabilities? : A Novel Monitoring Framework

Which Emerging Markets and Developing Economies Face Corporate Balance Sheet Vulnerabilities? : A Novel Monitoring Framework

This paper introduces a novel corporate financial vulnerability index that tracks financial conditions of the non-financial corporate sector. Using the balance sheet information of 14,207 listed non-financial firms in 69 emerging markets and develo...

Full description

Bibliographic Details
Main Authors: Feyen, Erik, Fiess, Norbert, Zuccardi Huertas, Igor, Lambert, Lara
Format: Working Paper
Language:English
en_US
Published: World Bank, Washington, DC 2017
Subjects:
CORPORATE VULNERABILITY
NON-FINANCIAL SECTOR
DEBT STRUCTURE
DEVELOPING ECONOMIES
EMERGING MARKET ECONOMIES
Online Access:http://documents.worldbank.org/curated/en/414901505845252068/Which-emerging-markets-and-developing-economies-face-corporate-balance-sheet-vulnerabilities-a-novel-monitoring-framework
http://hdl.handle.net/10986/28376
id okr-10986-28376
recordtype oai_dc
spelling okr-10986-283762021-06-08T14:42:48Z Which Emerging Markets and Developing Economies Face Corporate Balance Sheet Vulnerabilities? : A Novel Monitoring Framework Feyen, Erik Fiess, Norbert Zuccardi Huertas, Igor Lambert, Lara CORPORATE VULNERABILITY NON-FINANCIAL SECTOR DEBT STRUCTURE DEVELOPING ECONOMIES EMERGING MARKET ECONOMIES This paper introduces a novel corporate financial vulnerability index that tracks financial conditions of the non-financial corporate sector. Using the balance sheet information of 14,207 listed non-financial firms in 69 emerging markets and developing economies, the index shows that, at the global level, corporate vulnerability sharply increased since 2013 and stabilized in 2016. Regional trends are more heterogeneous, pointing to significant corporate vulnerabilities in Eastern Europe and Central Asia, as well as a deterioration of firms' financial conditions in Latin America, the Middle East and North Africa, and Sub-Saharan Africa in recent years. The energy sector has exhibited the fastest deterioration, especially since 2014, in part driven by the decline in oil prices. However, if currently relatively benign global funding conditions and higher commodity prices endure, companies may have an opportunity to strengthen their balance sheets. The paper also finds that the index has leading indicator properties for socioeconomic outcomes, such as a rise in unemployment and an economic recession, and outperforms a commonly used "debt at risk" approach. 2017-09-21T21:09:50Z 2017-09-21T21:09:50Z 2017-09 Working Paper http://documents.worldbank.org/curated/en/414901505845252068/Which-emerging-markets-and-developing-economies-face-corporate-balance-sheet-vulnerabilities-a-novel-monitoring-framework http://hdl.handle.net/10986/28376 English en_US Policy Research Working Paper;No. 8198 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Europe and Central Asia Latin America & Caribbean Middle East and North Africa
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
en_US
topic CORPORATE VULNERABILITY
NON-FINANCIAL SECTOR
DEBT STRUCTURE
DEVELOPING ECONOMIES
EMERGING MARKET ECONOMIES
spellingShingle CORPORATE VULNERABILITY
NON-FINANCIAL SECTOR
DEBT STRUCTURE
DEVELOPING ECONOMIES
EMERGING MARKET ECONOMIES
Feyen, Erik
Fiess, Norbert
Zuccardi Huertas, Igor
Lambert, Lara
Which Emerging Markets and Developing Economies Face Corporate Balance Sheet Vulnerabilities? : A Novel Monitoring Framework
geographic_facet Europe and Central Asia
Latin America & Caribbean
Middle East and North Africa
relation Policy Research Working Paper;No. 8198
description This paper introduces a novel corporate financial vulnerability index that tracks financial conditions of the non-financial corporate sector. Using the balance sheet information of 14,207 listed non-financial firms in 69 emerging markets and developing economies, the index shows that, at the global level, corporate vulnerability sharply increased since 2013 and stabilized in 2016. Regional trends are more heterogeneous, pointing to significant corporate vulnerabilities in Eastern Europe and Central Asia, as well as a deterioration of firms' financial conditions in Latin America, the Middle East and North Africa, and Sub-Saharan Africa in recent years. The energy sector has exhibited the fastest deterioration, especially since 2014, in part driven by the decline in oil prices. However, if currently relatively benign global funding conditions and higher commodity prices endure, companies may have an opportunity to strengthen their balance sheets. The paper also finds that the index has leading indicator properties for socioeconomic outcomes, such as a rise in unemployment and an economic recession, and outperforms a commonly used "debt at risk" approach.
format Working Paper
author Feyen, Erik
Fiess, Norbert
Zuccardi Huertas, Igor
Lambert, Lara
author_facet Feyen, Erik
Fiess, Norbert
Zuccardi Huertas, Igor
Lambert, Lara
author_sort Feyen, Erik
title Which Emerging Markets and Developing Economies Face Corporate Balance Sheet Vulnerabilities? : A Novel Monitoring Framework
title_short Which Emerging Markets and Developing Economies Face Corporate Balance Sheet Vulnerabilities? : A Novel Monitoring Framework
title_full Which Emerging Markets and Developing Economies Face Corporate Balance Sheet Vulnerabilities? : A Novel Monitoring Framework
title_fullStr Which Emerging Markets and Developing Economies Face Corporate Balance Sheet Vulnerabilities? : A Novel Monitoring Framework
title_full_unstemmed Which Emerging Markets and Developing Economies Face Corporate Balance Sheet Vulnerabilities? : A Novel Monitoring Framework
title_sort which emerging markets and developing economies face corporate balance sheet vulnerabilities? : a novel monitoring framework
publisher World Bank, Washington, DC
publishDate 2017
url http://documents.worldbank.org/curated/en/414901505845252068/Which-emerging-markets-and-developing-economies-face-corporate-balance-sheet-vulnerabilities-a-novel-monitoring-framework
http://hdl.handle.net/10986/28376
_version_ 1764466745339281408

Similar Items