Do Phoenix Miracles Exist? Firm-Level Evidence from Financial Crises
This paper provides empirical evidence on firm recoveries from financial system collapses in developing countries (systemic sudden stops episodes), and compares them with the experience in the United States in the 2008 financial crisis. Prior resea...
| Main Authors: | , , |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
|
| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110919161453 http://hdl.handle.net/10986/3563 |
| id |
okr-10986-3563 |
|---|---|
| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ABSENCE OF CREDIT ACCESS TO CREDIT ACCOUNTING ADMINISTRATIVE EXPENSES AMORTIZATION ASSET SALES ASSET STRUCTURE BALANCE SHEET BALANCE-SHEET BANK CREDIT BANK LENDING BANKING CRISES BANKRUPT BENCHMARK BOND INDEX BORROWINGS BROKERS CAPITAL FLOW CAPITAL FLOWS CAPITAL MARKETS CAPITAL STOCK CAPITAL STRUCTURE CASH BALANCE CASH BALANCES CASH DIVIDENDS CASH FLOW CASH FLOWS CASH HOLDINGS CASH OUTFLOWS CHECKS COMMERCIAL BANKS COMMERCIAL INCOME COMMON STOCK CONSUMER LOANS CORPORATE DEBT CORPORATE INVESTMENT CORPORATE PROFITS CREDIT CRUNCH CREDIT CRUNCHES CREDIT LEVELS CREDIT LINES CREDIT MARKETS CRISIS COUNTRY CURRENCY CURRENCY CRISES DEBT DEBT FINANCING DEBT ISSUANCE DEBT MATURITY DEBT POSITIONS DECISION MAKING DEPENDENT DEPOSIT DEPOSIT MONEY BANKS DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIVIDEND DIVIDEND PAYMENTS DIVIDENDS DOLLAR DEBT EARNINGS EARNINGS BEFORE INTEREST ECONOMIC ACTIVITY ECONOMIC OUTLOOK ECONOMIC POLICY EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET BOND EMERGING MARKET COUNTRIES EMERGING MARKET FIRMS EMERGING MARKETS EQUIPMENT EQUITY ISSUANCE EQUITY ISSUANCES EQUITY ISSUES EXPENDITURE EXPENDITURES EXTERNAL BORROWING EXTERNAL CREDIT EXTERNAL FINANCE EXTERNAL FINANCING FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL CONSTRAINTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DISTRESS FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL RESOURCES FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL SHOCK FINANCIAL STATEMENTS FINANCIAL STUDIES FINANCIAL SYSTEM FINANCING COSTS FIRM SALES FIXED ASSETS FORECASTS FOREIGN EXCHANGE GDP GDP DEFLATOR GLOBAL CAPITAL GLOBAL CAPITAL MARKET GROWTH OPPORTUNITIES INCOME STATEMENT INCOME STATEMENTS INDIVIDUAL FIRM INDIVIDUAL FIRMS INDUSTRIAL LOANS INSURANCE INTERNATIONAL BANK INTERNATIONAL FINANCIAL STATISTICS INVENTORIES INVENTORY INVESTING INVESTMENT CASH FLOW SENSITIVITIES INVESTMENT DECISIONS INVESTMENT OPPORTUNITIES INVESTMENT PATTERNS INVESTMENT-CASH FLOW SENSITIVITIES ISSUANCE LEVERAGE LIMITED ACCESS LIQUIDITY LIQUIDITY CRUNCH LIQUIDITY MANAGEMENT LOCAL CURRENCY LONG TERM FINANCING LONG-TERM BORROWING LONG-TERM BORROWINGS LONG-TERM DEBT LONG-TERM DEBT MARKET LONG-TERM DEBT MARKETS LONG-TERM INVESTMENTS MARKET INTEGRATION MARKET RISK MATURITY MISMATCH MERGER MERGERS MICRO DATA NATIONAL INCOME NET CAPITAL OUTPUT OVERDRAFTS POSITIVE COEFFICIENT PRIVATE CREDIT PRIVATE SECTOR BANK PRIVATE SECTOR CREDIT PRIVATE SECTOR DEVELOPMENT PROFITABILITY PUBLIC POLICY REAL ECONOMIC ACTIVITY REAL ESTATE REAL ESTATE LOANS REAL GDP RECESSION RECESSIONS RECOVERY PERIOD RECOVERY PERIODS RESOLUTION MECHANISMS RETURN RETURNS SALE OF INVESTMENTS SALE OF PROPERTY SAVINGS SECURITIES SELF-FINANCING SHAREHOLDER SHORT TERM BORROWING SHORT TERM BORROWINGS SHORT TERM CREDIT SHORT-TERM BORROWING SHORT-TERM DEBT SHORT-TERM DEBTS SHORT-TERM FINANCING SOURCES OF CREDIT STOCK ISSUANCE STOCK ISSUANCES STOCK OPTIONS SYSTEMIC BANKING CRISES SYSTEMIC CRISES TERM CREDIT TRANSITION ECONOMIES TROUGH VALUE ADDED WAGES WARRANTS WORKING CAPITAL WORLD DEVELOPMENT INDICATORS |
| spellingShingle |
ABSENCE OF CREDIT ACCESS TO CREDIT ACCOUNTING ADMINISTRATIVE EXPENSES AMORTIZATION ASSET SALES ASSET STRUCTURE BALANCE SHEET BALANCE-SHEET BANK CREDIT BANK LENDING BANKING CRISES BANKRUPT BENCHMARK BOND INDEX BORROWINGS BROKERS CAPITAL FLOW CAPITAL FLOWS CAPITAL MARKETS CAPITAL STOCK CAPITAL STRUCTURE CASH BALANCE CASH BALANCES CASH DIVIDENDS CASH FLOW CASH FLOWS CASH HOLDINGS CASH OUTFLOWS CHECKS COMMERCIAL BANKS COMMERCIAL INCOME COMMON STOCK CONSUMER LOANS CORPORATE DEBT CORPORATE INVESTMENT CORPORATE PROFITS CREDIT CRUNCH CREDIT CRUNCHES CREDIT LEVELS CREDIT LINES CREDIT MARKETS CRISIS COUNTRY CURRENCY CURRENCY CRISES DEBT DEBT FINANCING DEBT ISSUANCE DEBT MATURITY DEBT POSITIONS DECISION MAKING DEPENDENT DEPOSIT DEPOSIT MONEY BANKS DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIVIDEND DIVIDEND PAYMENTS DIVIDENDS DOLLAR DEBT EARNINGS EARNINGS BEFORE INTEREST ECONOMIC ACTIVITY ECONOMIC OUTLOOK ECONOMIC POLICY EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET BOND EMERGING MARKET COUNTRIES EMERGING MARKET FIRMS EMERGING MARKETS EQUIPMENT EQUITY ISSUANCE EQUITY ISSUANCES EQUITY ISSUES EXPENDITURE EXPENDITURES EXTERNAL BORROWING EXTERNAL CREDIT EXTERNAL FINANCE EXTERNAL FINANCING FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL CONSTRAINTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DISTRESS FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL RESOURCES FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL SHOCK FINANCIAL STATEMENTS FINANCIAL STUDIES FINANCIAL SYSTEM FINANCING COSTS FIRM SALES FIXED ASSETS FORECASTS FOREIGN EXCHANGE GDP GDP DEFLATOR GLOBAL CAPITAL GLOBAL CAPITAL MARKET GROWTH OPPORTUNITIES INCOME STATEMENT INCOME STATEMENTS INDIVIDUAL FIRM INDIVIDUAL FIRMS INDUSTRIAL LOANS INSURANCE INTERNATIONAL BANK INTERNATIONAL FINANCIAL STATISTICS INVENTORIES INVENTORY INVESTING INVESTMENT CASH FLOW SENSITIVITIES INVESTMENT DECISIONS INVESTMENT OPPORTUNITIES INVESTMENT PATTERNS INVESTMENT-CASH FLOW SENSITIVITIES ISSUANCE LEVERAGE LIMITED ACCESS LIQUIDITY LIQUIDITY CRUNCH LIQUIDITY MANAGEMENT LOCAL CURRENCY LONG TERM FINANCING LONG-TERM BORROWING LONG-TERM BORROWINGS LONG-TERM DEBT LONG-TERM DEBT MARKET LONG-TERM DEBT MARKETS LONG-TERM INVESTMENTS MARKET INTEGRATION MARKET RISK MATURITY MISMATCH MERGER MERGERS MICRO DATA NATIONAL INCOME NET CAPITAL OUTPUT OVERDRAFTS POSITIVE COEFFICIENT PRIVATE CREDIT PRIVATE SECTOR BANK PRIVATE SECTOR CREDIT PRIVATE SECTOR DEVELOPMENT PROFITABILITY PUBLIC POLICY REAL ECONOMIC ACTIVITY REAL ESTATE REAL ESTATE LOANS REAL GDP RECESSION RECESSIONS RECOVERY PERIOD RECOVERY PERIODS RESOLUTION MECHANISMS RETURN RETURNS SALE OF INVESTMENTS SALE OF PROPERTY SAVINGS SECURITIES SELF-FINANCING SHAREHOLDER SHORT TERM BORROWING SHORT TERM BORROWINGS SHORT TERM CREDIT SHORT-TERM BORROWING SHORT-TERM DEBT SHORT-TERM DEBTS SHORT-TERM FINANCING SOURCES OF CREDIT STOCK ISSUANCE STOCK ISSUANCES STOCK OPTIONS SYSTEMIC BANKING CRISES SYSTEMIC CRISES TERM CREDIT TRANSITION ECONOMIES TROUGH VALUE ADDED WAGES WARRANTS WORKING CAPITAL WORLD DEVELOPMENT INDICATORS Ayyagari, Meghana Demirgüç-Kunt, Asli Maksimovic, Vojislav Do Phoenix Miracles Exist? Firm-Level Evidence from Financial Crises |
| relation |
Policy Research Working Paper ; No. 5799 |
| description |
This paper provides empirical evidence
on firm recoveries from financial system collapses in
developing countries (systemic sudden stops episodes), and
compares them with the experience in the United States in
the 2008 financial crisis. Prior research found that
economies recover from systemic sudden stop episodes before
the financial sector. These recoveries are called Phoenix
miracles, and the research questioned the role of the
financial system in recovery. Although an average of the
macro data across a sample of systemic sudden stop episodes
over the 1990s appears consistent with the notion of Phoenix
recoveries, closer inspection reveals heterogeneity of
responses across the countries, with only a few countries
fitting the pattern. Micro data show that across countries,
only a small fraction (less than 31 percent) of firms follow
a pattern of recovery in sales without a recovery in
external credit, and even these firms have access to
external sources of cash. The experience of firms in the
United States during the 2008 financial crisis also suggests
no evidence of credit-less recoveries. An examination of the
dynamics of firms' financing, investment and payout
policies during recovery periods shows that far from being
constrained, the firms in the sample are able to access
long-term financing, issue equity, and significantly expand
their cash holdings. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Ayyagari, Meghana Demirgüç-Kunt, Asli Maksimovic, Vojislav |
| author_facet |
Ayyagari, Meghana Demirgüç-Kunt, Asli Maksimovic, Vojislav |
| author_sort |
Ayyagari, Meghana |
| title |
Do Phoenix Miracles Exist? Firm-Level Evidence from Financial Crises |
| title_short |
Do Phoenix Miracles Exist? Firm-Level Evidence from Financial Crises |
| title_full |
Do Phoenix Miracles Exist? Firm-Level Evidence from Financial Crises |
| title_fullStr |
Do Phoenix Miracles Exist? Firm-Level Evidence from Financial Crises |
| title_full_unstemmed |
Do Phoenix Miracles Exist? Firm-Level Evidence from Financial Crises |
| title_sort |
do phoenix miracles exist? firm-level evidence from financial crises |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110919161453 http://hdl.handle.net/10986/3563 |
| _version_ |
1764387221501116416 |
| spelling |
okr-10986-35632021-04-23T14:02:10Z Do Phoenix Miracles Exist? Firm-Level Evidence from Financial Crises Ayyagari, Meghana Demirgüç-Kunt, Asli Maksimovic, Vojislav ABSENCE OF CREDIT ACCESS TO CREDIT ACCOUNTING ADMINISTRATIVE EXPENSES AMORTIZATION ASSET SALES ASSET STRUCTURE BALANCE SHEET BALANCE-SHEET BANK CREDIT BANK LENDING BANKING CRISES BANKRUPT BENCHMARK BOND INDEX BORROWINGS BROKERS CAPITAL FLOW CAPITAL FLOWS CAPITAL MARKETS CAPITAL STOCK CAPITAL STRUCTURE CASH BALANCE CASH BALANCES CASH DIVIDENDS CASH FLOW CASH FLOWS CASH HOLDINGS CASH OUTFLOWS CHECKS COMMERCIAL BANKS COMMERCIAL INCOME COMMON STOCK CONSUMER LOANS CORPORATE DEBT CORPORATE INVESTMENT CORPORATE PROFITS CREDIT CRUNCH CREDIT CRUNCHES CREDIT LEVELS CREDIT LINES CREDIT MARKETS CRISIS COUNTRY CURRENCY CURRENCY CRISES DEBT DEBT FINANCING DEBT ISSUANCE DEBT MATURITY DEBT POSITIONS DECISION MAKING DEPENDENT DEPOSIT DEPOSIT MONEY BANKS DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIVIDEND DIVIDEND PAYMENTS DIVIDENDS DOLLAR DEBT EARNINGS EARNINGS BEFORE INTEREST ECONOMIC ACTIVITY ECONOMIC OUTLOOK ECONOMIC POLICY EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET BOND EMERGING MARKET COUNTRIES EMERGING MARKET FIRMS EMERGING MARKETS EQUIPMENT EQUITY ISSUANCE EQUITY ISSUANCES EQUITY ISSUES EXPENDITURE EXPENDITURES EXTERNAL BORROWING EXTERNAL CREDIT EXTERNAL FINANCE EXTERNAL FINANCING FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL CONSTRAINTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DISTRESS FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL RESOURCES FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL SHOCK FINANCIAL STATEMENTS FINANCIAL STUDIES FINANCIAL SYSTEM FINANCING COSTS FIRM SALES FIXED ASSETS FORECASTS FOREIGN EXCHANGE GDP GDP DEFLATOR GLOBAL CAPITAL GLOBAL CAPITAL MARKET GROWTH OPPORTUNITIES INCOME STATEMENT INCOME STATEMENTS INDIVIDUAL FIRM INDIVIDUAL FIRMS INDUSTRIAL LOANS INSURANCE INTERNATIONAL BANK INTERNATIONAL FINANCIAL STATISTICS INVENTORIES INVENTORY INVESTING INVESTMENT CASH FLOW SENSITIVITIES INVESTMENT DECISIONS INVESTMENT OPPORTUNITIES INVESTMENT PATTERNS INVESTMENT-CASH FLOW SENSITIVITIES ISSUANCE LEVERAGE LIMITED ACCESS LIQUIDITY LIQUIDITY CRUNCH LIQUIDITY MANAGEMENT LOCAL CURRENCY LONG TERM FINANCING LONG-TERM BORROWING LONG-TERM BORROWINGS LONG-TERM DEBT LONG-TERM DEBT MARKET LONG-TERM DEBT MARKETS LONG-TERM INVESTMENTS MARKET INTEGRATION MARKET RISK MATURITY MISMATCH MERGER MERGERS MICRO DATA NATIONAL INCOME NET CAPITAL OUTPUT OVERDRAFTS POSITIVE COEFFICIENT PRIVATE CREDIT PRIVATE SECTOR BANK PRIVATE SECTOR CREDIT PRIVATE SECTOR DEVELOPMENT PROFITABILITY PUBLIC POLICY REAL ECONOMIC ACTIVITY REAL ESTATE REAL ESTATE LOANS REAL GDP RECESSION RECESSIONS RECOVERY PERIOD RECOVERY PERIODS RESOLUTION MECHANISMS RETURN RETURNS SALE OF INVESTMENTS SALE OF PROPERTY SAVINGS SECURITIES SELF-FINANCING SHAREHOLDER SHORT TERM BORROWING SHORT TERM BORROWINGS SHORT TERM CREDIT SHORT-TERM BORROWING SHORT-TERM DEBT SHORT-TERM DEBTS SHORT-TERM FINANCING SOURCES OF CREDIT STOCK ISSUANCE STOCK ISSUANCES STOCK OPTIONS SYSTEMIC BANKING CRISES SYSTEMIC CRISES TERM CREDIT TRANSITION ECONOMIES TROUGH VALUE ADDED WAGES WARRANTS WORKING CAPITAL WORLD DEVELOPMENT INDICATORS This paper provides empirical evidence on firm recoveries from financial system collapses in developing countries (systemic sudden stops episodes), and compares them with the experience in the United States in the 2008 financial crisis. Prior research found that economies recover from systemic sudden stop episodes before the financial sector. These recoveries are called Phoenix miracles, and the research questioned the role of the financial system in recovery. Although an average of the macro data across a sample of systemic sudden stop episodes over the 1990s appears consistent with the notion of Phoenix recoveries, closer inspection reveals heterogeneity of responses across the countries, with only a few countries fitting the pattern. Micro data show that across countries, only a small fraction (less than 31 percent) of firms follow a pattern of recovery in sales without a recovery in external credit, and even these firms have access to external sources of cash. The experience of firms in the United States during the 2008 financial crisis also suggests no evidence of credit-less recoveries. An examination of the dynamics of firms' financing, investment and payout policies during recovery periods shows that far from being constrained, the firms in the sample are able to access long-term financing, issue equity, and significantly expand their cash holdings. 2012-03-19T18:04:41Z 2012-03-19T18:04:41Z 2011-09-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110919161453 http://hdl.handle.net/10986/3563 English Policy Research Working Paper ; No. 5799 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper |