The Asian financial crisis of 1997-98 was a shock to Japan and the world. The rapidity with which fast-growing economies were hit by currency attacks and then economic chaos, the spread of the crisis first among disparate regional economies and then as far as Brazil and Russia, and the seeming...

We analyze a large database collected from newspaper articles that report on major episodes of corporate restructuring in Japan between 1981 and 2007. By linking this database with financial data on public firms, we identify changes in the likelihood that a distressed undergoes restructuring, as...