Corporate-Sector Functional Currency: An International Comparison
Why this work is in the frame
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Bibliographic record
Abstract
Since 2012, Chile’s corporate debt has increased as a percentage of GDP, mainly explained by external debt, high even relative to comparable countries. This dynamic owes mainly to firms that use the U.S. dollar (USD) as their functional currency in their financial statements, so for these firms dollar-denominated debt does not generate a currency mismatch in their balance sheets. This paper studies the relevance of firms with the USD as their functional currency using a cross-country comparison at the asset level of the corporate sector. Our results show that the case of Chile is not isolated as, for example, Canada, Norway, Israel, Australia, and Peru exhibit an important share of firms with this characteristic. We also find that Chile is the country with the highest proportion of firms with dollar accounting with respect to GDP (64% in 2017). In addition, these countries share a common factor, since these companies’ assets are concentrated in economic sectors oriented towards international trade. In Chile the importance of these sectors, like Basic Materials, Forestry and paper, and Mining, explains the high proportions of firms with USD as their functional currency. These conclusions are important to consider when analyzing a country's external debt and the potential exchange rate risks, such as currency mismatch, due to the effect of dollar debt in the balance sheet. During depreciations, it has been a concern among Latin-American firms, especially during the emerging-market financial crises of the 1990s.
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Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.002 | 0.001 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.000 |
| Bibliometrics | 0.001 | 0.001 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.001 | 0.001 |
| Open science | 0.002 | 0.002 |
| Research integrity | 0.000 | 0.002 |
| Insufficient payload (model declined to judge) | 0.002 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it