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http://hdl.handle.net/10419/36909
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| Title: | | Excess leverage and productivity growth in emerging economies: Is there a threshold effect?  |
| Authors: | | Coricelli, Fabrizio Driffield, Nigel Pal, Sarmistha Roland, Isabelle |
| Issue Date: | | 2010 |
| Series/Report no.: | | Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 4834 |
| Abstract: | | The paper examines the relationship between leverage and growth in a group of emerging central and eastern European countries, who are at different levels of financial market development. We hypothesize a non-linear relationship in that moderate leverage could boost growth while very high leverage could lower it by increasing the likelihood of financial distress and bankruptcy. Estimates of a Threshold model confirm the non-linear relationship in our sample, after controlling for various firm, industry and financial market characteristics. We also endogenously determine a threshold level of leverage beyond which further increases in leverage could lower TFP growth. |
| Subjects: | | Excess leverage bank efficiency market capitalization TFP growth Threshold model non-linear relationship transition experience |
| JEL: | | G32 O16 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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