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Parisa Kamali

.549. While the model matches the dynamic moments of small and large firms and the average export intensity of small firms well, it cannot quantitatively match the average export intensity of large firms without exporting experience. However, the model still generates higher export intensities for new direct exporters with indirect exporting experience. Finally, the calibrated model implies indirect exporting is less persistent than direct exporting. The probability of remaining an indirect exporter for small firms is 0.734 and 0.811 for large firms. These probabilities

Ms. Manuela Goretti and Mr. Marcos R Souto

: an Event Study of Past Crisis CASES 21. Currently, average corporate debt leverage in the Euro area periphery stands at about 134 percent of equity (as of end-2011) on a consolidated national-accounts basis, with a large share of firms well above the high-debt thresholds identified in the empirical analysis. The global and European crises have exposed the vulnerabilities of companies’ over-leveraged balance sheets in these countries. Due to their heavy dependence on the domestic banking sector, weak domestic and external environment, and the sharp tightening in

International Monetary Fund

new constitutional arrangements provide an opportunity for the establishment of a stable macroeconomic framework . Regardless of the chosen approach to debt relief, arrangements need to provide a strong basis for sustained strengthening in fiscal discipline. Enhanced fiscal transparency and more efficient management are also needed. To improve competitiveness and potential growth, a more flexible use of labor, better education and training, and greater product market competition are essential. Improved governance of public firms, well-targeted infrastructure

International Monetary Fund. European Dept.

would support these efforts. While the diversification of funding sources has served firms well, efforts are needed to address data gaps and enhance the oversight of nonbank lending. Robust governance and well-designed origination rules of the MDB’s operations will help contain contingent liability risks to public finances. Ensuring that the MFSA has adequate resources is critical to preserve its operational independence and maintain effective supervision. Sustained efforts are needed to safeguard the financial system’s integrity. Robust implementation and effective

Mr. Se-Jik Kim
This paper presents a framework for quantitatively evaluating the macroeconomic effects of corporate restructuring and applies it to Japan. Using firm-level financial statement data, it estimates total factor productivity (TFP) of individual Japanese firms. Given the estimated distribution of productivity across firms, the paper simulates the effect of optimal restructuring, that is, reallocation of resources from less-productive firms to more-productive ones, on the dynamic path of aggregate output. The results show that the benefits of restructuring could substantially exceed the costs.
Mr. Se-Jik Kim

year-specific idiosyncratic shocks, I use a three-year-average productivity for each firm, that is, A i = ∑ s = 2000 2002 A i , s 3 , where A i, s represents productivity of the i -th firm in year s. The three-year-average productivity ( A i ) may represent the underlying long-run productivity of each firm well, given that there is a strong persistence in productivity of each individual Japanese firm over time. According to Worldscope , the three-year-average productivity of each firm is highly correlated to its long-run average productivity. 4 For the 1

Ms. Manuela Goretti and Mr. Marcos R Souto
High corporate indebtedness can pose an important threat to the adjustment processes in some of the Euro area periphery countries, through its drag on investment as well as the possible migration of private sector losses to the sovereign balance sheet. This paper examines the macroeconomic implications of corporate debt overhang in recent years, confirming empirical evidence in the literature on the relationship between a firm’s balance sheet position and its investment choices, especially beyond certain threshold levels. Building on an event study of past crisis experiences with corporate deleveraging, it also discusses the expected macro-financial impact of the ongoing deleveraging processes in these countries, presenting available policy options to facilitate an orderly balance-sheet adjustment and support a return to productivity and growth.
International Monetary Fund. European Dept.
This 2017 Article IV Consultation highlights that Malta’s economic growth remains one of the strongest in Europe, owing to favorable economic conditions and sound policies, which advanced structural reforms and supported the strengthening of private and public balance sheets. Output is estimated to have expanded by 6.8 percent in 2017, accompanied by dynamic job creation, which brought unemployment to a record low. Strong inflows of foreign workers and rising labor force participation kept wage pressures contained in most sectors, thus contributing to low inflation despite a positive output gap. The outlook is favorable, with growth decelerating gradually and converging to about 3 percent over the medium term.

to entry, such as large capital requirements, limit the access of potential firms. Well-known also is the hypothesis that, as a vehicle for technology transfer, FDI contributes to productivity growth. (See World Bank (1999) .) In a companion paper (Razin, Sadka, and Yuen ( 1999b )), we extend the model of this paper to provide a theoretical framework under which gains from FDI can be based not only on the inside information argument, but also on its role in the promotion of competition and growth of productivity in the domestic economy. In many cases, the losses

International Monetary Fund. European Dept.

promote investment and improve the economy’s resilience to shocks. The expected increase in the provision coverage ratio and further improvements of the insolvency process would support these efforts. While the diversification of funding sources has served firms well, efforts are needed to address data gaps and enhance the oversight of nonbank lending. Robust governance and well-designed origination rules of the MDB’s operations will help contain contingent liability risks to public finances. Ensuring that the MFSA has adequate resources is critical to preserve its