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Leverage shocks : firm-level evidence on debt overhang and investment
Cevik, Serhan; Miryugin, Fedor - 2020
-pronged approach to investigate the relationship between corporate leverage and fixed investment spending. The empirical analysis …
Persistent link: https://www.econbiz.de/10012486107
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Pouring oil on fire : interest deductibility and corporate debt
Dallari, Pietro; End, Nicolas; Miryugin, Fedor; Tieman, … - 2018
This paper investigates the role of tax incentives towards debt finance in the buildup of leverage in the nonfinancial corporate (NFC) sector, using a large firm-level dataset. We find that so-called debt bias is a significant driver of leverage, for both small and medium-sized enterprises and...
Persistent link: https://www.econbiz.de/10011978432
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The COVID-19 impact on corporate leverage and financial fragility
Haque, Sharjil Muktafi; Varghese, Richard - 2021
We study the impact of the COVID-19 recession on capital structure of publicly listed U.S. firms. Our estimates suggest leverage (Net Debt/Asset) decreased by 5.3 percentage points from the pre-shock mean of 19.6 percent, while debt maturity increased moderately. This de-leveraging effect is...
Persistent link: https://www.econbiz.de/10012796218
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At a cost : the real effects of thin capitalization rules
Mooij, Ruud A. de; Liu, Li - 2021
the cost of capital for affected affiliates, can also negatively affect real investment. Exploiting unique panel data on … multinational companies in 34 countries during 2006-2014, we estimate that the size of this adverse investment effect can be large …, and dependent on the statutory corporate tax rate and the tightness of the safe-haven ratio. Negative investment effects …
Persistent link: https://www.econbiz.de/10012517932
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Exchange rate fluctuations and firm leverage
Shim, Ilhyock; Kalemli-Ozcan, Sebnem; Liu, Xiaoxi - 2020
We quantify the effect of exchange rate fluctuations on firm leverage. When home currency appreciates, firms who hold foreign currency debt and local currency assets observe higher net worth as appreciation lowers the value of their foreign currency debt. These firms can borrow more as a result...
Persistent link: https://www.econbiz.de/10012486078
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Stress testing U.S. leveraged corporates in a COVID-19 world
Caceres, Carlos; Cerdeiro, Diego A.; Pan, Dan; Suchanan … - 2020
Persistent link: https://www.econbiz.de/10012392538
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Non-financial corporate debt in advanced economies, 2010–17
Almeida, Luiza Antoun de; Tressel, Thierry - 2020
This paper studies the evolution of non-financial corporate debt among publicly listed companies in major advanced economies between 2010 and 2017. Since 2010, firms have started to rely more on corporate bond markets and have used part of their debt to increase their holdings of cash. In our...
Persistent link: https://www.econbiz.de/10012252676
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Managerial Entrenchment and the Choice of Debt Financing
Sy, Amadou N. R. - 1999
firm’s credit risk is low, management issues public bonds because of the value gains from increased flexibility rather than … restrictions are selectively relaxed. In contrast, when credit risk is high, management issues private debt because of the value …
Persistent link: https://www.econbiz.de/10014400172
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Credit Risk Spreads in Local and Foreign Currencies
Wiener, Zvi - 2009
The paper shows how-in a Merton-type model with bankruptcy-the currency composition of debt changes the risk profile of a company raising a given amount of financing, and thus affects the cost of debt. Foreign currency borrowing is cheaper when the exchange rate is positively correlated with the...
Persistent link: https://www.econbiz.de/10014403081
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External Capital Structure : Theory and Evidence
Lane, Philip R. - 2000
Recent years have witnessed a change in the composition of capital flows to developing countries, and FDI and equity flows have been playing an increasing role. In this paper we discuss the challenges for international macroeconomics that these developments pose and characterize stylized facts...
Persistent link: https://www.econbiz.de/10014403502