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Chapter-5
IMPACT OF BOOM, BUBBLE & BUST IN STOCK MARKET IN INDIA

Introduction Definition of 'Boom' A period of time during which sales of a product or business activity increases very rapidly. In the stock market, booms are associated with bull markets, whereas busts are associated with bear markets. The cyclical nature of the market and the economy in general suggests that every strong economic growth bull market in history has been followed by a sluggish low growth bear market. Stocks that suddenly become very popular and gain strong elevated market profits are the result of a stock boom. An example of this is the internet technologies boom or "dot-com bubble" that occurred during the late '90s. This was one of the most famous booms in stock market history. As often occurs in a boom-and-bust cycle, this boom was followed by one of the biggest busts in history. This occurs because the growth that takes place in a boom is rarely maintained and backed up by actual company profits. It has been empirically documented that the IPO marketexperiences cycles in terms of volumes of new companies, whichis referred to in the literature as hot and cold periods. It isconsidered to be an empirical anomaly for which no unanimousexplanation is yet provided for. The most well-known among thesighted explanations is technological innovation or positiveproductivity shock that changes the prospects of IPOs from aparticular industry. Empirical studies have found that small andyoung firms time their offers to use investors

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optimism in theirfavour and get listed during the booming period. There areevidences of high under-pricing and industry clustering during thehot periods, though their nature and extent have differed fromcountry to country1. Only four countries in the world (namely U.S.A., India,Romania and Canada)2have more than three thousand listedcompanies in their stock exchanges. In India, during 1990s alone,3,537 companies got listed on the Bombay Stock Exchange (BSE). The last decade is also important, since the Indian economy ingeneral and primary capital market, in particular, has undergoneremarkable changes during this period. The liberalisationprogramme initiated in 1992 along with other changes has enabledlarge Foreign Direct Investment (FDI) and Foreign InstitutionalInvestment (FII) inflows, giving a big push to the capital market. The abolition of the Controller of Capital Issues (CCI) also had amajor impact on the activities in the Indian primary market. Itwitnessed a boom phase (199396) when more than 50 companiesgot listed every month. However, from end 1996 till recently theprimary market has witnessed a considerable decline in the numberof new issues and the total amount of capital rose. A stock market boom is caused when many investors join the market and speculate with more funds than they did previously, leading to a sudden jump in growth and often a jump in profits for many investors. The boom is the opposite of a bust, where the markets suddenly collapses, and are related to each other. The boom is caused by several things, including over-exuberance on the part of investors.

1. Wild Optimism

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A boom has energy of its own, a snowball effect that keeps it going stronger the larger the effect grows. Investors are spurred on by the market itself to make increasingly larger speculations, and a general feeling grows that risks are worth the price of making money in current positive market conditions. This wild optimism results in a flocking to the market, especially to popular industries. New Technology New technology is one of the most common reasons for stock market booms. New technology not only creates entire new industries to invest in (investors, remembering the vast growth of computer stocks like IBM, always react positively to new tech industries), but also affects many other types of businesses. If technology helps businesses improve functionality, then their stocks are likely to increase under the hopeful eyes of investors as well. Increase in Businesses Another common cause of a stock market boom is an increase in businesses. Times that see a sharp rise in the number of new businesses, or the number of businesses that entrepreneurs decide to go public with, often coincide with a stock market boom. New businesses mean new investment opportunities, and the chance of some businesses to become extremely successful. Financial Changes Widespread Ad financial changes also cause stock market booms, often when governments support markets in some way. They may release funds to bailout companies or create new tax benefits for businesses, but these typically only lead to small increases. Booms are caused more often by governments deregulating industries and making it easier for businesses to sell stock, start or seek funding.

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Cyclic Nature An overarching cause of stock market booms is the cyclical nature of the stock market. Due to many different factors, markets naturally go through booms and busts, sometimes large and sometimes small. The seeds of each bust are in each boom, and vice-versa. This means that the busts where a stock market falls prepare the way for the next boom and surge of growth with new investment.

The Stock Market Boom Although the stock market has the reputation of being a risky investment, it did not appear that way in the 1920s. With the mood of the country exuberant, the stock market seemed an infallible investment in the future. As more people invested in the stock market, stock prices began to rise. This was first noticeable in 1925. Stock prices then bobbed up and down throughout 1925 and 1926, followed by a strong upward trend in 1927. The strong bull market (when prices are rising in the stock market) enticed even more people to invest. And by 1928, a stock market boom had begun. The stock market boom changed the way investors viewed the stock market. No longer was the stock market for long-term investment. Rather, in 1928, the stock market had become a place where everyday people truly believed that they could become rich. Interest in the stock market reached a fevered pitch. Stocks had become the talk of every town. Discussions about stocks could be

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heard everywhere, from parties to barber shops. As newspapers reported stories of ordinary people - like chauffeurs, maids, and teachers - making millions off the stock market, the fervor to buy stocks grew exponentially. Although an increasing number of people wanted to buy stocks, not everyone had the money to do so. Buying on Margin When someone did not have the money to pay the full price of stocks, they could buy stocks "on margin." Buying stocks on margin means that the buyer would put down some of his own money, but the rest he would borrow from a broker. In the 1920s, the buyer only had to put down 10 to 20 percent of his own money and thus borrowed 80 to 90 percent of the cost of the stock. Buying on margin could be very risky. If the price of stock fell lower than the loan amount, the broker would likely issue a "margin call," which means that the buyer must come up with the cash to pay back his loan immediately. In the 1920s, many speculators (people who hoped to make a lot of money on the stock market) bought stocks on margin. Confident in what seemed a neverending rise in prices, many of these speculators neglected to seriously consider the risk they were taking. Signs of Trouble By early 1929, people across the United States were scrambling to get into the stock market. The profits seemed so assured that even many companies placed money in the stock market. And even more problematically, some banks placed customers' money in the stock market (without their knowledge). With the stock market prices upward bound, everything seemed wonderful. When the great crash hit in October, these people were taken by surprise. However, there had been warning signs.

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On March 25, 1929, the stock market suffered a mini-crash. It was a prelude of what was to come. As prices began to drop, panic struck across the country as margin calls were issued. When banker Charles Mitchell made an announcement that his bank would keep lending, his reassurance stopped the panic. Although Mitchell and others tried the tactic of reassurance again in October, it did not stop the big crash. By the spring of 1929, there were additional signs that the economy might be headed for a serious setback. Steel production went down; house construction slowed; and car sales waned. At this time, there were also a few reputable people warning of an impending, major crash; however, as month after month went by without one, those that advised caution were labeled pessimists and ignored. Summer Boom Both the mini-crash and the naysayers were nearly forgotten when the market surged ahead during the summer of 1929. From June through August, stock market prices reached their highest levels to date. To many, the continual increase of stocks seemed inevitable. When economist Irving Fisher stated, "Stock prices have reached what looks like a permanently high plateau," he was stating what many speculators wanted to believe. On September 3, 1929, the stock market reached its peak with the Dow Jones Industrial Average closing at 381.17. Two days later, the market started dropping. At first, there was no massive drop. Stock prices fluctuated throughout September and into October until the massive drop on Black Thursday. Black Thursday - October 24, 1929

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On the morning of Thursday, October 24, 1929, stock prices plummeted. Vast numbers of people were selling their stocks. Margin calls were sent out. People across the country watched the ticker as the numbers it spit out spelled their doom. The ticker was so overwhelmed that it quickly fell behind. A crowd gathered outside of the New York Stock Exchange on Wall Street, stunned at the downturn. Rumors circulated of people committing suicide. To the great relief of many, the panic subsided in the afternoon. When a group of bankers pooled their money and invested a large sum back into the stock market, their willingness to invest their own money in the stock market convinced others to stop selling. The morning had been shocking, but the recovery was amazing. By the end of the day, many people were again buying stocks at what they thought were bargain prices. On "Black Thursday," 12.9 million shares were sold - double the previous record. Four days later, the stock market fell again.

STOCK MARKETS: A HISTORY OF BOOM AND BUST History is littered with stock market dips, shocks and crashes, throwing entire economies into turmoil. With the FTSE 100 down 23% on its recent high in 2007 and a potential recession on the horizon, Dan Hyde takes a look at the history of the stock market crash...

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The bears are back: A share trader in New York The 1720 South Sea Bubble Following costly British involvement in the War of the Spanish Succession, a deal was struck with the newly formed South Sea Company to finance the 10m British debt. Along with 6% interest, the deal also gave the South Sea Company a monopoly on British trading in the Spanish Americas. Shares in the company sky-rocketed as speculators spotted a real investment opportunity. However, trade did not develop well. King Philip of Spain was unwilling to negotiate more than three annual British voyages to the region and continuous interruption from officials and short skirmishes with the Spanish culminated when South Sea ships and assets were confiscated by Spain in 1718. All the while, the shares became more and more fashionable. Investors, oblivious to the lack of actual profit being made by the company, fell foul to company rumor-mongering that claimed of overseas success. In 1720, though, South Sea's house of cards collapsed. Traders finally caught on and a mad rush to sell shares ensued, leaving a whole generation of investors lay in ruins. To prevent another bubble, the sale of shares was outlawed by the government. Unfortunately, this made it difficult to start a legitimate business in Britain for more than a century until eventual repeal in 1825 when another crises hit.

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The Panic of 1825 Britain was again rebuilding after conflict, this time the Napoleonic Wars. The economy went into overdrive and the liberalizing of trade in Latin America created an export boom. Speculation was so intense that some investors even began to throw money into schemes involving the imaginary South American Republic of Poyais. In tandem, Bank of England allowed easy finance for the boom. By April the boom had become a bubble at bursting point. More than seventy banks collapsed and by Christmas, Bank of England intervention had failed to quell a now economy-wide panic. Stormy seas: Hogarthian image of the South Sea Company Legend has it that the Bank of England was itself in danger of collapse until reversing its caution and acting as the 'lender of last resort', bankrolled by French gold. 1866 Over end, Guerney& Co. With roots deep in Quaker East Anglia, Over end, Guerney had survived the Panic of 1825 as the great discount bank of its time, second only to the Bank of England in its turnover, and had since become known as the 'bankers' bank'. After the retirement of Samuel Guerney, though, a new breed of profit-hungry company directors expanded its core business into riskier investments such as shipyards, railways and other long-haul investments. The bank took short-term loans to fund risky long-term schemes, incurring liabilities four times the size of its assets. It was a costly mistake. When several of its creditors collapsed, the bank's share price plummeted and, in desperate need, it was refused assistance by the Bank of England.

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Boom to bust icon: Napoleon Over end suspended cash payments and panic spread across the country. The bank went into liquidation in June and its directors were tried at the Old Bailey for fraud. Other banks, now unable to find funding, also went under. With nearly 200 companies defaulting, the ensuing depression lasted several years. The crisis led to Walter Bagehot's famous call for the Bank of England to act as the 'lender of last resort' preventing economy-wide collapse by providing the last line of finance for troubled banks.How this is Money can help investorsnull.

The Wall Street Crash, 1929 Events in 1929 New York represented the most devastating shock in stock market history. After the difficulties of the First World War, the twenties represented a period of peace and prosperity, revolutionized by new technologies such as cars and radios. For those keen to take advantage, the stock market was the place to make a quick buck and unprecedented availability led to huge numbers of ordinary people ploughing their money into booming markets.

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But, as always, the optimism couldn't last forever and the first small dips in the market began to appear as early as September. As fluctuation continued, investors began to panic, selling shares in the hope of rescuing dwindling profits. 'Black Thursday', 24 October, saw shares drop by 13%. Some Wall Street bankers tried to inspire confidence and lift the market, buying as many shares as possible, and it worked, at least briefly. By Monday, panic had struck again and the 29th, 'Black Tuesday', signaled the end of prosperity and the beginning of the Great Depression of the 1930s. Within a few days of the downturn near universal trust had turned into universal suspicion. Thirty billion dollars had been lost in the US alone and it took twenty-five years for the Dow Jones to recover to pre-1929 levels. The Wall Street Crash signaled the beginning of one of the most tumultuous periods in world history.

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1987 Black Monday On 19 October 1987 world stock markets experienced their largest one-day crash in history. The falls were practically instantaneous in all financial markets. The Dow Jones lost 22.6% of its value and the FTSE 100 sunk 10.8%. Reverberations from 'Black Monday' were felt across the globe. The exact causes of the crash remain unknown: it was a moment when fear eclipsed greed. Prolonged bull markets had prepared the ground for 'bust', but the shock largely caught investors by surprise. Within two years the Dow Jones had recovered and trading curbs and circuit halters were implemented that would suspend markets before they could collapse. Such a situation materialized for the first time in the 1997 Asian Crisis. The Asian Crisis of 1997

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Fears of worldwide economic meltdown were sparked when Thailand decided to float its currency, the Baht. After decades of outstanding economic growth in the tiger economies of the Far East, many countries had borrowed large amounts of international capital. Thailand's debt meant it was effectively bankrupt and severe devaluation in the baht saw economic crisis spread to Japan, Korea and the rest of Asia. The prospect of a complete collapse in the Korean economy, the world's eleventh largest, led the International Monetary Fund (IMF) to step in, averting potentially worldwide consequences. The IMF created a series of rescue packages to restore confidence and by 1999 Asian economies had begun to recover. Definitionof Bubble:With the aftereffects of the most recent financial crisis still being felt today, therehas been an astounding amount of public attention surrounding the subprime mortgagecrisis and how the economy and policy makers should respond. The idea of speculativebubbles and what happens when they burst is interesting because it challenges the idea ofmarket efficiency. In fact, these bubbles point to the power of investor psychology orother behavioural factors that impact the market in a significant way. An appropriate starting point would be to define what a speculative bubble is.Charles P. Kindleberger defines it as a loss of touch with rationality, something close tomass hysteria.1 Speculative bubbles have been defined as a trend in which the price of aclass of assets is driven up compared to its fundamental value, by the herding of investoroptimism into that particular sector.

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While some have accused the term bubble as being overused by the media andacademics alike, it well-characterizes the phenomenon in which hyped investors in themarket flood into specific classes of assets, thereby driving prices away fromfundamental values. From the tulip mania in the 17th century, to the subprime mortgagebubble, such crises have been an ever-present phenomenon in global economies. Whilescholars and policy makers have strived to improve the financial system and mitigate theoccurrence of future bubbles, they have continued to present significant challenges to theworld time and again. Current research of bubbles has focused mainly on the anatomy of a bubble: inother words, the process of bubble formulation and the dynamics of a burst. On the otherhand, the aftereffects of the bursting of a bubble have mostly been preserved to the arenaof fiscal discussions and public policy: in other words, how to clean up the mess. Thereare exceptions, however, including Barro and Ursuas paper Macroeconomic Crisessince 1870 in which the authors focus on the phenomenon of decreasing consumption(real per capita personal consumer expenditure) after economic crises, and the lowaverage of real bill returns observed during crises.2

WHAT CAUSES THE SLOWDOWN IN THE MACRO ECONOMY AFTER A MARKET CRASH? Investment Since a drop in stock returns does not fully explain the decline in GDP growth,particularly in the longer run, I started to probe possible other reasons for the decline.

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While the degree of causation among each contributing factor is beyond the scope of thisanalysis, I speculate that a decrease in liquidity and investment in the economy caused bythe dishevelment of financial markets could be a significant force that prolongs the effectof market bubbles. For instance, the following quote from Kalemli-Ozcan, et al. explains theimportance of a troubled banking sector that cannot provide credit to domestic firms9and the corresponding slowdown in the economic productivity during a crisis: Liquidity decreases because domestic banks cannot provide credit. At the same timecapital flows come to a halt and foreigners exit from the crisis economy, so-calledsudden stops, leading to a decline in foreign credit. As a result, the liquidity constrainedfirms cannot undertake new investment and hence contract production.10(Kalemli-Ozcan, et. al, 2010) In other words, a crash in the stock market could lead to a deterioration ofinvestors availability of funds and confidence in the market, which would then lead todecreased investment. This decreased investment would then cause a shortage of fundsfor banks and other lenders, which would immediately mean a decline in liquidity forfirms. The firms, then, would cut down on their capital expenditures, thus causing aslowdown in production. In fact, Poulsen and Hufbauer have shown that the level of foreign directinvestment (FDI) decreases quite dramatically during a crisis, and that an important causeof recessions after crises may be the traditional strong link between economic growthand FDI flows.11 Figure 1 demonstrates the correlation between FDI levels and GDPgrowth in the most recent crisis. The figure suggests that the level of FDI and GDPgrowth becomes strongly correlated during a crisis while the relationship is not as clearfor non-crisis periods.

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Figure 1. FDI and Real GDP growth

(Source: Poulsen, L. (2011). Foreign direct investment in times of crisis)

Unemployment In addition to the level of investment in the economy, data also shows that there isa significant correlation between the bursting of a bubble and the rise in unemploymentrate with a 1-year lag and that this correlation persists for at least three years. The lagswere calculated as the effect of the occurrence of a bubble, measured by a dummyvariable (1 if bubble, 0 if not) and the unemployment rate 1) in the concurrent period, 2) ayear afterwards, 3) 2 years afterwards, and 4) 3 years afterwards. Table 4 shows that theimpact of a bubble on the unemployment rate lasts longer than the impact of a bubble onGDP growth; While the impact of a bubble on the GDP growth peaks at a year after thecrisis and fades away, the relationship between the occurrence of a bubble andunemployment rate is affected even three years after a crash. The results were robustwhen country dummies were included. In the following regression, the dummy variablewas 1 if there was a bubble in the time period observed minus the 0, 1, 2, or 3-year lag.The dummy variable was 0 when there was no bubble during the previously mentionedtime frame.

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Table 4.Results of the regression:unemployment%tt+1 =dummy + c

Irrational exuberance: Martha Lane Fox, who floated lastminute.com at the peak During the 1990s, the surging popularity of the internet and computer technologies, seen as the future of business and trading, culminated in disappointment in 2000/01. Speculative investment in internet firms, many of whom put growth before profit, backfired spectacularly as the market became saturated with dubious business plans and practices. Failing companies with plenty of investment but no profits to show for it triggered the mass sale of shares. Huge numbers of investors and firms who had wanted a part in the booming sector faced large losses. A mild recession was triggered in some countries with many left jobless and the Federal Reserve forced to cut rates to stem the tide. Many economists and commentators argue that it was the Fed's drastic ratecutting that helped pump up the next bubble in property, which has been the central plank for the current credit crisis and stock market woes of 2008.

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The main stock market index the Bombay Sensex is up 79.6% year-to-date. Is this astonishing rise justified by fundamentals in the economy or is the Indian stock market forming another big bubble? In this post let me present some points to indicate that the stock market in India is in fact forming a bubble that is not sustainable. One of the main reasons the US economy collapsed recently is the long-term explosive growth of the financial sector. In the past few decades the US economy was mainly driven by the financial sector. The FIRE economy was comprised of Financial, Insurance and Real Estate sectors. Historically the financial industries that included banking, investment banking performed the simple function of lending and deposit-taking and channeling capital from investors to companies that needed them. They acted as a middle man offering a valuable service and earned a percentage of the transactions involved. Similarly the real estate industry was a boring industry that comprised of mainly building and selling homes to people that could afford them. The insurance industry also concentrated on offering auto, home and other insurance services to customers. However all the traditional roles were abandoned in the past few decades as companies evolved into high profit making machines in a short time with strategies involving high-octane risk taking. As the financial industry became the main driver of the US economy, other sectors that constituted the real economy such as manufacturing lost their significance. The dramatic rise of the importance of the financial industry can be seen in the following chart:

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Source: TheAtlantic.com

Writing in The Atlantic in an article titled The Quite Coup Simon Johnson noted: From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent. Pay rose just as dramatically. From 1948 to 1982, average compensation in the financial sector ranged between 99 percent and 108 percent of the average for all domestic private industries. From 1983, it shot upward, reaching 181 percent in 2007. Thus the financial sectors profit alone was an incredible 41% of total domestic corporate profits in the past decade. As a result of this growth, compensation levels in the industry sky-rocketed to astronomical levels. During this bubble period, MBAs were minted by the thousands and any college graduate wanted to work in Wall Street or the banking industry and make millions. The financial sectors GDP share also increase significantly in the period from 1990 to 2006. In the US, it increased from 23% to 31%, a full 8 percentage points. In the UK, it was more than 10% but in France and Germany it was only

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in the 6% range. The chart below shows the growth of the share of the financial sector in GDP for select advanced economies since the mid-80s.

Source: How might the current financial crisis shape financial sector regulation and structure? Bank of International Settlements (BIS)

Alan Greenspans cheap money provided fuel to the fire culminating in the formation of the credit bubble. Once the bubble was popped in late 2007, the US economy and indeed the global economy went into a tailspin. The financial sector saw the collapse of many formerly solid and reputed firms like Lehman Brothers, Bear Stearns, Washington Mutual, IndyMac Bank and many others. The wrongfully named real estate proved to be a fake sector ending in the foreclosures of millions of homes and thousands of empty shopping malls and office buildings in the commercial space. In the insurance industry other than

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AIG no major failures happened since insurance is one industry that is highly regulated and is controlled by the individual states. AIGs collapse was caused not by its insurance arm, but by its tiny financial division which played big in the derivatives market. The financial and real sector that triggered the global economic crisis was responsible for the millions of jobs that vanished overnightworldwide and trillions of dollars in wealth that were wiped out. In a nutshell, the so-called FIRE economy burned the US economy very badly. So by now you are wondering what does the above have anything to do with the Indian economy. Well there is a lot in fact when we compare the US and India. Similar to the US, where the financial sector became a major part of the economy, the banking sector and insurance sector is growing to be a big part of the Indian economy.

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The banking and insurance sector contributed less than 11% in 1990. In 2007 it amounted to about 15%. While it is still less than the growth of the financial sector in the US, it is still a cause for concern. The financial sector is growing rapidly in India and is fueling various speculative bubbles including the real estate bubble. A few of the other factors that are inflating the bubble in India include: 1. From its March low of 8,160 the Sensex closed at 17,326 on Friday for a gain of over 100%. In the past few months Foreign Institutional Investors (FIIs) have poured at least $1B monthly in the Indian market pulling it all the way to 17K+ levels in just 6 months. While a billion $ is not much in a developed market like the US or in Europe, it has a lot of weight in emerging markets like India where most stocks do not have high trading volumes. Hence it is easy to move the market one way or the other with large bets.

Source: Frontline

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The current P/E of the market is over 21.The fundamentals of the economy does not support this growth in the market. When foreign investors pulled out nearly $12B from the market the bottom fell out. Now they have poured in around $9B till September this year. 2. Due to political interference India does not have the capacity to absorb all the foreign capital flowing into the country. This is especially true with Foreign Direct Investment (FDI) where land acquisition for factories is a huge problem. According to a BusinessWeek article Whats Holding India Back some $98 billion in investments by business is on hold due to farmers unwilling to sell land for industrial purposes. 3. Corruption at all levels is another drag on the economy. From petty government office clerks to high level multi-billion dollar military deals, corruption is common. Transparency International ranks India number 85 in its annual corruption perceptions index. 4. The Real Estate sector is the largest bubble India has ever seen. Prices of ordinary house, apartments and even land have skyrocketed in the past few years. Speculators play the real estate market like Americans did up until 2007. 5. The IT sector is given too much importance when in fact it employs a tiny percentage of the working population. Despite the foreign exchange the IT industry brings into the country, the IT industry is just considered as a cheap labor source for foreign companies looking to save money. Many domestic Indians do not trust in the IT sector helping in the development of India. 6. Exports are down at the annual rate of 20% thru September this year. Domestic consumption cannot replace the fall in exports to overseas markets. 7. In addition to the foreign capital, the majority of the current growth is coming from government spending thru stimulus plans. The government borrows

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heavily to fund the expensive stimulus plans. Once the spending is over growth will slow down to a trickle. 8. Stocks are rising to sky high levels without strong fundamentals. Many stocks jump double digit percentages in a week like during the dot-com bubble era in the US. Speculation is rampant with many investors trying to make a quick buck as the market keeps going up. After last years dramatic fall, irrational exuberance has returned to the Indian markets. 9. The lack of a vast bond market, forces many investors to invest in the equity market which pushes prices to abnormal levels.

The Latest Crisis Stock index returns:

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(Source: Yahoo Finance)

Unemployment rate:

(Source: World Bank)

The graphs show that, even though the S&P 500 started to recover in the first quarter of2009, unemployment was still rising until 2010. This trend is consistent with the findingsfrom this paper. In addition, while per capita GDP decreased from 2008 to 2009, it hadstarted to recover from 2009 to 2010.

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Kindleberger, Charles. Manias, Panics, and Crashes: A History of Financial Crises. pp 38 Kalemli-Ozcan et al. What Hinders Investment in the Aftermath of Financial Crises:

Insolvent Firms or Illiquid Banks? (2010)

10

Kalemli-Ozcan et al. What Hinders Investment in the Aftermath of Financial Crises:

Insolvent Firms or Illiquid Banks? (2010)

11

Poulsen, L., Hufbauer, G. (2011). Foreign direct investment in times of crisis.