Dollarization and Enterprise's Behaviors: The Case of Cambodia

Daiju AIBA, Ranareth THA
Although Cambodia has been heavily dollarized for decades, the debate on dollarization has long relied on the measure of FX deposits over M2 or total deposits. There is a paucity of empirical studies on Cambodian dollarization at micro level, and it has been unclear to what extent enterprises are dependent on FX currency, or how much FX currency has prevailed in industries. Since businesses often operate across provinces, enterprises are possibly significant drivers to spread FX currency widely
more » ... FX currency widely throughout a country. The role of enterprises may be significant for the transmission of dollarization in Cambodia. The primary objective of this paper is to present the real picture of the dollarization of enterprises, using data from a survey carried out on 856 enterprises from 25 provinces from October 2014 to January 2015. We investigate different aspects of enterprises' operations, such as revenues, expenditures, price quotations, exchange rates, borrowing behaviors, and potential risks of currency mismatches in the firm's operations. Our analysis aims at facilitating discussion and providing policy implications for de-dollarization. We focus on how firms manage to deal with the currency mismatch risks in their operation. Compared to households, the operations of enterprises are more
doi:10.15057/28386 fatcat:f4y25p2gwjc4zbr27vwqvvwayy