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This paper estimates the determinants of external debt distress in low-income countries (LICs), disentangling the roles of institutions, shocks, and policies. The most prominent factors in raising the risk of debt distress are the weak protection of private property rights, adverse shocks to real non-oil commodity prices, and a high debt burden. Results also suggest that weak economic institutions tend to raise the probability of debt distress through persistently weak economic policies and high vulnerability to external shocks. The model enables a more granular analysis of debt sustainability in LICs and has a higher predictive power compared to the earlier scant literature.

Exports and Imports --- International Lending and Debt Problems --- International economics --- Debt sustainability --- External debt --- Debt burden --- Debt default --- Public and publicly-guaranteed external debt --- Debts, External --- United States

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The paper offers a method to quantify benefits and costs of corporate debt restructuring, with an application to Korea. We suggest a "persistent ICR<1" criterion to capture firms that had ICR<1 for multiple consecutive years and thus will likely require restructuring. We assess the benefits of debt restructuring by estimating the effects of removing a firm's debt overhang on its investment and hiring decisions. We refine the assumptions on the cost of debt restructuring based on the literature, and focus not only on creditor losses, but also on the employment impact of corporate restructuring. Benchmark results for Korea suggest 5.5-7.5 percent of GDP creditor losses and a 0.4-0.9 percent of the labor force employment impact from the debt restructuring. These are compensated by a permanent 0.4-0.9 percentage points increase in future GDP growth thanks to higher corporate investment and 0.05-0.1 percent of labor force higher hiring in the subsequent years. The key qualitative result is that corporate debt restructurings "pay off" in the medium term: their economic cost is recouped over about 10 years.

Corporate debt --- Debt relief --- Econometric models --- E-books --- Econometric models. --- Debt renegotiation --- Debt rescheduling --- Debt restructuring --- Relief, Debt --- Renegotiation, Debt --- Rescheduling, Debt --- Restructuring, Debt --- Debtor and creditor --- Corporations --- Debt --- Debt financing (Corporations) --- Law and legislation --- Finance --- Exports and Imports --- Financial Risk Management --- Labor --- Industries: Manufacturing --- Investment --- Capital --- Intangible Capital --- Capacity --- Business Fluctuations --- Cycles --- Bankruptcy --- Liquidation --- Debt Management --- Sovereign Debt --- Employment --- Unemployment --- Wages --- Intergenerational Income Distribution --- Aggregate Human Capital --- Aggregate Labor Productivity --- Labor Force and Employment, Size, and Structure --- International Lending and Debt Problems --- Industry Studies: Manufacturing: General --- Labour --- income economics --- International economics --- Manufacturing industries --- Labor force --- Debt burden --- Manufacturing --- Asset and liability management --- External debt --- Economic sectors --- Debts, External --- Economic theory --- Labor market --- Korea, Republic of --- Income economics

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Mounting external debt and large-scale capital flight have been at the forefront of Africa's economic problems since the 1980s. External Debt and Capital Flight in Sub-Saharan Africa, edited by S. Ibi Ajayi and Mohsin S. Khan, takes a penetrating look at debt and capital flight during the 1990s in Ghana, Kenya, Nigeria, Tanzania, and Uganda. The book describes the size and composition of debt in the selected countries and examines the causes of the debt buildup. It also assesses the extent of capital flight and suggests ways of stemming the flight of financial resources.

Debts, External --- Capital movements --- Dettes extérieures --- Mouvements de capitaux --- Political Science --- Law, Politics & Government --- Public Finance --- 339.727.2 <6> --- -Debts, External --- -AFR / Africa - Afrika - Afrique --- 382.242.0 --- 339.115 --- Debts, Foreign --- Debts, International --- External debts --- Foreign debts --- International debts --- Debt --- International finance --- Investments, Foreign --- Capital flight --- Capital flows --- Capital inflow --- Capital outflow --- Flight of capital --- Flow of capital --- Movements of capital --- Balance of payments --- Foreign exchange --- Internationale kapitaalbeweging. Buitenlandse leningen. Buitenlandse kredieten. Internationale kapitaalbeweging. Buitenlandse investeringen. Kapitaalinvoer. Kapitaaluitvoer. Kapitaalvlucht--Afrika --- Balans van het kapitaalverkeer: algemeenheden. --- Buitenlandse schuld. Debt Equity Swap in LDC. --- 339.727.2 <6> Internationale kapitaalbeweging. Buitenlandse leningen. Buitenlandse kredieten. Internationale kapitaalbeweging. Buitenlandse investeringen. Kapitaalinvoer. Kapitaaluitvoer. Kapitaalvlucht--Afrika --- Dettes extérieures --- AFR / Africa - Afrika - Afrique --- Buitenlandse schuld. Debt Equity Swap in LDC --- Balans van het kapitaalverkeer: algemeenheden --- Banks and Banking --- Exports and Imports --- Financial Risk Management --- Foreign Exchange --- Investments: Stocks --- Macroeconomics --- International Investment --- Long-term Capital Movements --- International Lending and Debt Problems --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Trade: General --- Debt Management --- Sovereign Debt --- International economics --- Currency --- Banking --- Finance --- Investment & securities --- Capital outflows --- External debt --- Debt burden --- Debt service --- Banks and banking --- Exports --- Uganda