| Title |
Comparative Analysis of Default Risk of Construction Company during Macroeconomic Fluctuations |
| Authors |
Choi, Jae-Kyu ; Yoo, Seung-Kyu ; Kim, Jae-Jun |
| DOI |
http://dx.doi.org/10.6106/KJCEM.2012.13.4.060 |
| Keywords |
Macroeconomic Fluctuations ; Default Risk of Construction Company ; KMV Model ; Expected Default Frequency |
| Abstract |
The past IMF foreign exchange crisis and subprime financial crisis had a big influence on variability of macroeconomics, even if the origin of its occurrence might be different. This not only had a significant infrequence on the overall industries, but also produced many insolvent companies by being closely linked with a management environment of an individual construction company leading the construction industry. Actually, the level of default risk of construction companies before and after fluctuation of macroeconomics gets to experience a rapid changing process, and a difference in reaction against shock exists according to each company. Accordingly, the purpose of this paper is to confirm the fluctuation process of the default risk of construction companies under the fluctuation of macroeconomics such as the IMF financial crisis and the subprime mortgage crisis. As an analysis result, it is judged that the subprime financial crisis gave bigger shock to construction companies than the foreign exchange crisis, and it is expected that this would have a relation with the construction market before shock of macroeconomics. In addition, it was analyzed that when comparing insolvent companies with normal companies, the recovery speed of normal companies is faster. It is judged that this was affected by a difference of internal business capacity between insolvent companies and normal companies. |