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  • P-ISSN 1738-656X
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KDI 정책연구. Vol. 26, No. 1, June 2004, pp. 73-104

https://doi.org/10.23895/kdijep.2004.26.1.73

× KDI Open Access is a program of fully open access journals to facilitate the widest possible dissemination of high-quality research. All research articles published in KDI JEP are immediately, permanently and freely available online for everyone to read, download and share in terms of the Creative Commons Attribution 4.0 International License.

Success Factors of the Korean Corporate Workouts

Dong soo Kang

Author & Article History

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Abstract

This paper explores the empirical performances of the workout companies with special interests in the effectiveness of corporate reorganizing tools on their revitalization. In the empirical analysis it considers the criteria of success or failure in restructuring from both creditors' and debtors' perspectives. The key results are summarized as follows. First, the initial conditions on the debt structure of the workout companies are significantly related to the revitalization from both creditors' and debtors' point of view. Second, the debt restructuring instruments are insignificant in the success of corporate turnarounds while the debt-to-equity conversion has been a relatively effective tool. Third, the self-restructuring efforts, employment downsizing and governance reshuffling do not affect the performances significantly. The higher importance of initial conditions than corporate restructuring efforts may imply that Korean corporate workouts serve better to the needs of creditor financial institutions which are to maximize debt recovery and of the government which is to overcome financial crisis.

Keywords

워크아웃, 기업구조조정, 로짓분석

JEL Code

G34, G28, C25

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