Joint analysis of the non-linear debt-growth nexus and capital account liberalization: New evidence from sub-Saharan region
| Autor: | Wafa Khémiri, Hédi Noubbigh |
|---|---|
| Rok vydání: | 2021 |
| Předmět: |
Economics and Econometrics
050208 finance Sub saharan Exploit media_common.quotation_subject Yield (finance) 05 social sciences Monetary economics Capital account liberalization Investment (macroeconomics) Debt 0502 economics and business Agency (sociology) Economics 050207 economics Nexus (standard) Finance media_common |
| Zdroj: | The Quarterly Review of Economics and Finance. 80:614-626 |
| ISSN: | 1062-9769 |
| Popis: | This paper conducts an empirical investigation of the debt-growth nexus at firm level. We exploit a panel of sub-Saharan firms observed over the period 2004–2014 to jointly assess the impact of debt and financial liberalization on firm growth measured in terms of sales. Using a system GMM estimator, we find an inverted U-shaped relationship between debt and firm growth. However, the form of this relationship was reversed (U-shaped) by examining the joint effect of debt and capital account liberalization. This change results from the adoption of the policy of financial liberalization put in place by the regulatory authorities of the sub-Saharan countries. In addition, our results show that investment impact firm growth. Consequently, agency and trade-off theories are admitted. These findings may yield important policy implications. Policy makers must optimize financial decisions and adopt a gradual financial liberalization policy, thus ensuring the survival of sub-Saharan firms. |
| Databáze: | OpenAIRE |
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