The Impact of the Global Financial Crisis on Firms' Capital Structure
Using a data set covering about 277,000 firms across 79 countries over the period 2004-11, this paper examines the evolution of firms capital structure during the global financial crisis and its aftermath in 2010-11. The study finds that firm lever...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2015/12/25705513/impact-global-financial-crisis-firms-capital-structure http://hdl.handle.net/10986/23623 |
| Summary: | Using a data set covering about 277,000
firms across 79 countries over the period 2004-11, this
paper examines the evolution of firms capital structure
during the global financial crisis and its aftermath in
2010-11. The study finds that firm leverage and debt
maturity declined in advanced economies and developing
countries, even in countries that did not experience a
crisis. The deleveraging and maturity reduction were
particularly significant for privately held firms, including
small and medium enterprises. For small and medium-size
enterprises, these effects were larger in countries with
less efficient legal systems, weaker information-sharing
mechanisms, shallower banking systems, and more restrictions
on bank entry. In contrast, there is weaker evidence of a
significant decline of leverage and debt maturity among
firms listed on a stock exchange, which are typically much
larger than other firms and likely benefit from the spare
tire of easier access to capital market financing. |
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