Economics & Finance / Macroeconomics / Economic Crises & Recessions
How Korea's 1997 Crisis Destroyed Small Firms While Big Companies Thrived
The Impact of the 1997 Korean Financial Crisis on Small and Large Firms
In 1997, the Korean financial crisis hit small businesses far harder than large corporations—but the real story is why. This video breaks down a study by Yun Jung Kim, Linda Tesar, and Jing Zhang from the University of Michigan, analyzing over 4,000 Korean firms (including bankrupt ones). The key finding: foreign debt wiped out small firms due to an extreme 'balance-sheet effect,' while big companies actually benefited from currency devaluation through exports and hedging. Most shocking? 90% of small firms with foreign debt had zero export revenue to offset losses. Discover how macroeconomic data can hide a microeconomic disaster, and why this matters for assessing financial risks today.
Site views and watch clicks are not YouTube play counts.
Comments
Comments are reviewed before publication. Do not include private information.