VERY PRELIMINARY

(do not quote, suggestion welcome) The fashionable analysis of financial crisis accentuates on the role of corporate debt composition bearing the maturity and currency mismatch. Using 226 listed companies in Jakarta Stock Exchange, this paper investigates the role of currency and maturity mismatches in propagating the negative effects of currency depreciation. By nature, depreciation could enhance export performance by its “competitiveness effect”, since price of goods should be cheaper. Nevertheless, due to the effects of maturity and currency mismatch, depreciation decreases net worth of the firms through “balance sheet effect”. This paper focuses on the impact of currency depreciation on firm-level investment. By panel data analysis, we find that firms with more dollar debt invest less in both long and short-term investment. Unfortunately, this paper fails to provide empirical evidence on the impact of currency depreciation on firm-level investment and other firm performance. However, it seems that the extreme currency depreciation followed by financial and economic crisis destroys structurally investment condition in Indonesia. Therefore, even though currency depreciation is not related significantly to firm-level investment, it is likely not true that the depreciation does not matter on firm as well as economic performance