Please use this identifier to cite or link to this item:
http://bura.brunel.ac.uk/handle/2438/5044
Title: | Leverage and productivity growth in emerging economies: Is there a threshold effect? |
Authors: | Coricelli, F Driffield, N Pal, S Roland, I |
Keywords: | Excess leverage;Bank efficiency;Market capitalisation;TFP growth;Threshold model;Non-linear relationship;Transition experience |
Issue Date: | 2010 |
Publisher: | Brunel University |
Citation: | Economics and Finance Working Paper, Brunel University, 10-21 |
Abstract: | While credit is essential for investment, innovation and economic growth, there are risks to unfettered credit booms. The present paper provides an innovative micro-economic approach to identify the threshold leverage beyond which corporate indebtedness becomes “excessive”. In particular, the paper hypothesizes a non-linear relationship in that moderate leverage could boost growth while very high leverage could restrict total factor productivity growth, through increased likelihood of financial distress and bankruptcy. Estimates of a threshold model for a group of emerging CEE countries confirm the non-linear relationship, after controlling for various firm, industry and financial market characteristics. |
URI: | http://bura.brunel.ac.uk/handle/2438/5044 |
Appears in Collections: | Economics and Finance Dept of Economics and Finance Research Papers |
Files in This Item:
File | Description | Size | Format | |
---|---|---|---|---|
1021[1].pdf | 430.96 kB | Adobe PDF | View/Open |
Items in BURA are protected by copyright, with all rights reserved, unless otherwise indicated.