Hidden Bibliographic Details
| Other authors / contributors: | Magud, Nicolas E., (IMFstaff), author.
Valencia, Fabian, (IMFstaff), author.
International Monetary Fund. Western Hemisphere Department.
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| ISBN: | 1513539930
9781513539935
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| ISSN: | 1018-5941
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| Notes: | "December 2015."
"Western Hemisphere Department."
Includes bibliographical references (pages 28-30).
Online resource; title from pdf title page (IMF.org Web site, viewed January 4, 2016).
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| Summary: | We examine how firm and country heterogeneity shape the response of corporate investment in emerging markets to changes in global interest rates and volatility. We test for the presence of (i) a financing channel originating from changes in the costs of external borrowing and (ii) a real options channel---reflecting firms' option values to delay investment. We find evidence of the coexistence of both channels. Financially weaker firms reduce investment by more in response to higher interest rates or volatility, while firms with stronger balance sheets become less willing to invest after volatility spikes. Furthermore, the intensity of the financing channel diminishes for firms in countries with lower public debt, higher foreign reserves, or deeper financial markets--Abstract.
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| Standard no.: | 10.5089/9781513539935.001
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