Corporate debt and investment: A firm-level analysis for stressed euro area countries
| Autor: | Ralph Setzer, Andreas Westphal, Stefan Gebauer |
|---|---|
| Rok vydání: | 2018 |
| Předmět: |
Finance
Economics and Econometrics 050208 finance business.industry 05 social sciences Debt-to-GDP ratio Monetary economics External debt Debt service ratio Debt overhang Return on investment 0502 economics and business Economics Debt ratio Internal debt 050207 economics Debt levels and flows business |
| Zdroj: | Journal of International Money and Finance. 86:112-130 |
| ISSN: | 0261-5606 |
| Popis: | This paper investigates the link between corporate debt and investment for a group of five peripheral euro area countries. Using firm-level data from 2005 to 2014, we postulate a non-linear corporate leverage-investment relationship and derive thresholds beyond which leverage has a negative and significant impact on investment. The investment sensitivity of debt increased after 2008 when financial distress intensified and firms had a lower capacity to finance investment from internal sources of funds. Our results also suggest that even moderate levels of debt can exert a negative influence on investment for smaller firms or when profitability is low. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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