Financial market reforms and corporate financing in Korea
Following the Asian financial crisis of 1997, the Korean economy experienced radical structural reforms, particularly in the financial sector. In this environment, Korea's corporate sector, once characterized by a high degree of leverage, turned to the capital market for financing, while banks diversified their lending targets. Our analysis of large firm-level data finds that, following the crisis, the corporate financing behaviour of both chaebol-affiliated and independent firms became more responsive to such factors as return on assets, cash flows and credit rating. On the lenders' side, the tighter prudential enforcement of the 1988 Basel capital adequacy requirements limited the supply of bank loans. We conclude that both the changed corporate incentives in an environment of greater market discipline and the improved prudential supervision explain much of the more diversified pattern of Korean corporate financing practices in the post-crisis period.
Sources of Corporate Financing and Economic Crisis in Korea: A Micro-Evidence
Using the firm-level data set, the paper attempts to examine the dynamic patterns in the allocation of credit across firms in recent Korea. In particular, the paper examines the dynamic patterns in the allocation of credit across large and small firms before and after the crisis. The data suggest that large firms, to some extent, are leaving banks and going to the capital market for their financing after the crisis. The data also suggest that profitable small firms are gaining easier access to the credit from financial institutions after the crisis. Is this shift (in the allocation of bank credit from large firms to small firms) due to lenders' choice or due to borrowers' changed incentives? The paper suggests that the improved lending practices of banks, at least partially, contributed to this shift of bank credit from large firms to small firms.
Socioeconomic and Security Implications of Chinese Migration in the Russian Far East
Several dimensions of migration from China into bordering areas of the Russian Far East (primarily Primorskiy Kray) are subjected to critical assessment: scale of migration economic impacts (for migrants and host regions) attitudes of the host-region population and regional security implications. The analysis suggests that the Russian Far East generally has limited economic attraction for Chinese migrants despite the importance of migration for cross-border relations and trade. The study is based on data from Russian statistical border and migration services; extensive interviews and on-site observations; review of regional newspapers; and a large (N= 1010) opinion survey of the local population. (authors)