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...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2015/12/25705513/impact-global-financial-crisis-firms-capital-structure http://hdl.handle.net/10986/23623 |
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okr-10986-23623 |
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oai_dc |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English en_US |
| topic |
PROFIT OPPORTUNITIES ACCOUNTING DEVELOPING COUNTRIES INTEREST ENTRY REQUIREMENTS DEBT CRISIS MATURITY STRUCTURE PRIVATE CREDIT DEVELOPING COUNTRIES BANK ENTRY BANKING SYSTEMS TOTAL DEBT CAPITAL STRUCTURES EQUITY FINANCING CAPITAL STRUCTURE BANKRUPTCY LAW LOAN SPREADS LOAN LOAN MATURITIES BORROWERS DEBT OVERHANG STOCK MARKET CAPITALIZATION DUMMY VARIABLE BANKRUPTCY MARKET ACCESS ASSET RATIO CASH FLOWS EXTERNAL FINANCE DEBT ISSUES SMALL BUSINESS LEGAL SYSTEMS INDEBTEDNESS MARKET ANALYSTS MARKET DEVELOPMENT CONTRACT ENFORCEMENT DEBT CONTRACT DEBT OUTSTANDING DEBT CAPITAL MARKET MARKETS FINANCIAL CRISES CREDITOR RIGHTS INTERNATIONAL DEBT EXTERNAL FINANCE INVESTMENT OPPORTUNITIES CORPORATE DEBT BANK CREDIT LOAN TERMS BAILOUT INVESTMENT DECISIONS TRANSACTIONS INDIVIDUAL LOAN EMERGING MARKETS DEBT FINANCING MACROECONOMIC INSTABILITY BOND MARKETS GOOD CRISIS COUNTRY OWNERSHIP STRUCTURE TRANSPARENCY COUNTRY RISK MARKET CAPITALIZATION MARKET CONDITIONS INTERNATIONAL DEBT SECURITIES TURNOVER FUTURE PRIVATE CREDIT BUREAU SHORT‐TERM DEBT CAPITALIZATION BANKRUPTCY PROCEDURES DEBT SECURITIES CREDIT INFORMATION ISSUANCE FIRM PERFORMANCE CORPORATE INVESTMENT DEFAULT PROBABILITIES MINORITY SHAREHOLDERS DEBT RATIOS SECURITIES FINANCIAL INFRASTRUCTURE FINANCIAL INFRASTRUCTURES LONG‐TERM DEBT SHAREHOLDERS FINANCIAL CRISIS POSITIVE COEFFICIENTS INTANGIBLE LEGAL SYSTEM INVESTOR PROTECTION LENDING GLOBAL FINANCE SHAREHOLDER MATURITIES FINANCIAL SYSTEMS LIABILITIES INTERNATIONAL BANKS CASH FLOW LONG‐ TERM DEBT ECONOMIC RISK STOCK MARKETS DEBT MATURITY LOAN DATA MARKET CAP DEPOSIT CAPITAL MARKETS INTERNATIONAL BANKS TRADE CREDIT LONG‐TERM DEBT LIQUIDATION STOCK DUMMY VARIABLES EXCHANGE PROPERTY RIGHTS STOCK MARKET BANKING SYSTEM LIQUIDITY EQUITY MARKET DISCLOSURE REQUIREMENTS MATURITY STRUCTURE POLITICAL ECONOMY MORTGAGE DEPOSIT MONEY BANKS BONDS ASYMMETRIC INFORMATION TAX MARKET INFRASTRUCTURE CREDITORS INTERNATIONAL BANK CREDITOR PENSION LOCAL BOND MARKET INCUMBENT BANKS CENTRAL BANK MATURITY PRIVATE BOND PROTECTION OF INVESTOR PROTECTION OF INVESTORS CREDIT BUREAUS CONTRACTS BOND MARKET CAPITALIZATION RETURN LENDERS LOANS CRISIS COUNTRIES FINANCIAL SYSTEM RULE OF LAW FINANCE RETURN ON ASSETS TAXES EQUITY BANKRUPTCY LAWS INVESTORS DEBT RATIO SOVEREIGN DEBT ASSETS RATIOS VALUE OF ASSETS MARKET CONTAGION TRADE FINANCE BANKING CRISIS FINANCIAL CRISIS ACCESS TO CAPITAL SUPPLY OF CREDIT ASSET RATIOS RETURNS DEBT MATURITY DEBT MATURITIES BOND MARKET WORKING CAPITAL CONTRACT PROPERTY BALANCE SHEET DEFAULT MARKET STOCK MARKET DEVELOPMENT MARKET VALUE CREDIT BUREAU PRODUCTIVE INVESTMENTS AVERAGE DEBT INTERESTS CORPORATE DEBT INVESTOR CORPORATE BONDS BANK CREDIT FIXED ASSETS FINANCIAL DEVELOPMENT BANK LOANS STOCK EXCHANGE BANKING CRISIS INVESTMENT BOND CAPITAL STRUCTURE COMPOSITION OF DEBT SHARE COLLATERAL SHORT‐TERM DEBT FINANCIAL MARKETS DEBT OBLIGATIONS TANGIBLE ASSETS FINANCIAL SHOCKS INSTITUTIONAL DEVELOPMENT EXTERNAL DEBT PROFIT INVESTMENTS ASSETS RATIO BANKING CRISES CAPITAL MARKET FINANCING PROFITS FINANCIAL MARKETS CORPORATE GOVERNANCE MACROECONOMIC INSTABILITY |
| spellingShingle |
PROFIT OPPORTUNITIES ACCOUNTING DEVELOPING COUNTRIES INTEREST ENTRY REQUIREMENTS DEBT CRISIS MATURITY STRUCTURE PRIVATE CREDIT DEVELOPING COUNTRIES BANK ENTRY BANKING SYSTEMS TOTAL DEBT CAPITAL STRUCTURES EQUITY FINANCING CAPITAL STRUCTURE BANKRUPTCY LAW LOAN SPREADS LOAN LOAN MATURITIES BORROWERS DEBT OVERHANG STOCK MARKET CAPITALIZATION DUMMY VARIABLE BANKRUPTCY MARKET ACCESS ASSET RATIO CASH FLOWS EXTERNAL FINANCE DEBT ISSUES SMALL BUSINESS LEGAL SYSTEMS INDEBTEDNESS MARKET ANALYSTS MARKET DEVELOPMENT CONTRACT ENFORCEMENT DEBT CONTRACT DEBT OUTSTANDING DEBT CAPITAL MARKET MARKETS FINANCIAL CRISES CREDITOR RIGHTS INTERNATIONAL DEBT EXTERNAL FINANCE INVESTMENT OPPORTUNITIES CORPORATE DEBT BANK CREDIT LOAN TERMS BAILOUT INVESTMENT DECISIONS TRANSACTIONS INDIVIDUAL LOAN EMERGING MARKETS DEBT FINANCING MACROECONOMIC INSTABILITY BOND MARKETS GOOD CRISIS COUNTRY OWNERSHIP STRUCTURE TRANSPARENCY COUNTRY RISK MARKET CAPITALIZATION MARKET CONDITIONS INTERNATIONAL DEBT SECURITIES TURNOVER FUTURE PRIVATE CREDIT BUREAU SHORT‐TERM DEBT CAPITALIZATION BANKRUPTCY PROCEDURES DEBT SECURITIES CREDIT INFORMATION ISSUANCE FIRM PERFORMANCE CORPORATE INVESTMENT DEFAULT PROBABILITIES MINORITY SHAREHOLDERS DEBT RATIOS SECURITIES FINANCIAL INFRASTRUCTURE FINANCIAL INFRASTRUCTURES LONG‐TERM DEBT SHAREHOLDERS FINANCIAL CRISIS POSITIVE COEFFICIENTS INTANGIBLE LEGAL SYSTEM INVESTOR PROTECTION LENDING GLOBAL FINANCE SHAREHOLDER MATURITIES FINANCIAL SYSTEMS LIABILITIES INTERNATIONAL BANKS CASH FLOW LONG‐ TERM DEBT ECONOMIC RISK STOCK MARKETS DEBT MATURITY LOAN DATA MARKET CAP DEPOSIT CAPITAL MARKETS INTERNATIONAL BANKS TRADE CREDIT LONG‐TERM DEBT LIQUIDATION STOCK DUMMY VARIABLES EXCHANGE PROPERTY RIGHTS STOCK MARKET BANKING SYSTEM LIQUIDITY EQUITY MARKET DISCLOSURE REQUIREMENTS MATURITY STRUCTURE POLITICAL ECONOMY MORTGAGE DEPOSIT MONEY BANKS BONDS ASYMMETRIC INFORMATION TAX MARKET INFRASTRUCTURE CREDITORS INTERNATIONAL BANK CREDITOR PENSION LOCAL BOND MARKET INCUMBENT BANKS CENTRAL BANK MATURITY PRIVATE BOND PROTECTION OF INVESTOR PROTECTION OF INVESTORS CREDIT BUREAUS CONTRACTS BOND MARKET CAPITALIZATION RETURN LENDERS LOANS CRISIS COUNTRIES FINANCIAL SYSTEM RULE OF LAW FINANCE RETURN ON ASSETS TAXES EQUITY BANKRUPTCY LAWS INVESTORS DEBT RATIO SOVEREIGN DEBT ASSETS RATIOS VALUE OF ASSETS MARKET CONTAGION TRADE FINANCE BANKING CRISIS FINANCIAL CRISIS ACCESS TO CAPITAL SUPPLY OF CREDIT ASSET RATIOS RETURNS DEBT MATURITY DEBT MATURITIES BOND MARKET WORKING CAPITAL CONTRACT PROPERTY BALANCE SHEET DEFAULT MARKET STOCK MARKET DEVELOPMENT MARKET VALUE CREDIT BUREAU PRODUCTIVE INVESTMENTS AVERAGE DEBT INTERESTS CORPORATE DEBT INVESTOR CORPORATE BONDS BANK CREDIT FIXED ASSETS FINANCIAL DEVELOPMENT BANK LOANS STOCK EXCHANGE BANKING CRISIS INVESTMENT BOND CAPITAL STRUCTURE COMPOSITION OF DEBT SHARE COLLATERAL SHORT‐TERM DEBT FINANCIAL MARKETS DEBT OBLIGATIONS TANGIBLE ASSETS FINANCIAL SHOCKS INSTITUTIONAL DEVELOPMENT EXTERNAL DEBT PROFIT INVESTMENTS ASSETS RATIO BANKING CRISES CAPITAL MARKET FINANCING PROFITS FINANCIAL MARKETS CORPORATE GOVERNANCE MACROECONOMIC INSTABILITY Demirguc-Kunt, Asli Martinez-Peria, Maria Soledad Tressel, Thierry The Impact of the Global Financial Crisis on Firms' Capital Structure |
| relation |
Policy Research Working Paper;No. 7522 |
| description |
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. |
| format |
Working Paper |
| author |
Demirguc-Kunt, Asli Martinez-Peria, Maria Soledad Tressel, Thierry |
| author_facet |
Demirguc-Kunt, Asli Martinez-Peria, Maria Soledad Tressel, Thierry |
| author_sort |
Demirguc-Kunt, Asli |
| title |
The Impact of the Global Financial Crisis on Firms' Capital Structure |
| title_short |
The Impact of the Global Financial Crisis on Firms' Capital Structure |
| title_full |
The Impact of the Global Financial Crisis on Firms' Capital Structure |
| title_fullStr |
The Impact of the Global Financial Crisis on Firms' Capital Structure |
| title_full_unstemmed |
The Impact of the Global Financial Crisis on Firms' Capital Structure |
| title_sort |
impact of the global financial crisis on firms' capital structure |
| publisher |
World Bank, Washington, DC |
| publishDate |
2016 |
| url |
http://documents.worldbank.org/curated/en/2015/12/25705513/impact-global-financial-crisis-firms-capital-structure http://hdl.handle.net/10986/23623 |
| _version_ |
1764454360243240960 |
| spelling |
okr-10986-236232021-04-23T14:04:16Z The Impact of the Global Financial Crisis on Firms' Capital Structure Demirguc-Kunt, Asli Martinez-Peria, Maria Soledad Tressel, Thierry PROFIT OPPORTUNITIES ACCOUNTING DEVELOPING COUNTRIES INTEREST ENTRY REQUIREMENTS DEBT CRISIS MATURITY STRUCTURE PRIVATE CREDIT DEVELOPING COUNTRIES BANK ENTRY BANKING SYSTEMS TOTAL DEBT CAPITAL STRUCTURES EQUITY FINANCING CAPITAL STRUCTURE BANKRUPTCY LAW LOAN SPREADS LOAN LOAN MATURITIES BORROWERS DEBT OVERHANG STOCK MARKET CAPITALIZATION DUMMY VARIABLE BANKRUPTCY MARKET ACCESS ASSET RATIO CASH FLOWS EXTERNAL FINANCE DEBT ISSUES SMALL BUSINESS LEGAL SYSTEMS INDEBTEDNESS MARKET ANALYSTS MARKET DEVELOPMENT CONTRACT ENFORCEMENT DEBT CONTRACT DEBT OUTSTANDING DEBT CAPITAL MARKET MARKETS FINANCIAL CRISES CREDITOR RIGHTS INTERNATIONAL DEBT EXTERNAL FINANCE INVESTMENT OPPORTUNITIES CORPORATE DEBT BANK CREDIT LOAN TERMS BAILOUT INVESTMENT DECISIONS TRANSACTIONS INDIVIDUAL LOAN EMERGING MARKETS DEBT FINANCING MACROECONOMIC INSTABILITY BOND MARKETS GOOD CRISIS COUNTRY OWNERSHIP STRUCTURE TRANSPARENCY COUNTRY RISK MARKET CAPITALIZATION MARKET CONDITIONS INTERNATIONAL DEBT SECURITIES TURNOVER FUTURE PRIVATE CREDIT BUREAU SHORT‐TERM DEBT CAPITALIZATION BANKRUPTCY PROCEDURES DEBT SECURITIES CREDIT INFORMATION ISSUANCE FIRM PERFORMANCE CORPORATE INVESTMENT DEFAULT PROBABILITIES MINORITY SHAREHOLDERS DEBT RATIOS SECURITIES FINANCIAL INFRASTRUCTURE FINANCIAL INFRASTRUCTURES LONG‐TERM DEBT SHAREHOLDERS FINANCIAL CRISIS POSITIVE COEFFICIENTS INTANGIBLE LEGAL SYSTEM INVESTOR PROTECTION LENDING GLOBAL FINANCE SHAREHOLDER MATURITIES FINANCIAL SYSTEMS LIABILITIES INTERNATIONAL BANKS CASH FLOW LONG‐ TERM DEBT ECONOMIC RISK STOCK MARKETS DEBT MATURITY LOAN DATA MARKET CAP DEPOSIT CAPITAL MARKETS INTERNATIONAL BANKS TRADE CREDIT LONG‐TERM DEBT LIQUIDATION STOCK DUMMY VARIABLES EXCHANGE PROPERTY RIGHTS STOCK MARKET BANKING SYSTEM LIQUIDITY EQUITY MARKET DISCLOSURE REQUIREMENTS MATURITY STRUCTURE POLITICAL ECONOMY MORTGAGE DEPOSIT MONEY BANKS BONDS ASYMMETRIC INFORMATION TAX MARKET INFRASTRUCTURE CREDITORS INTERNATIONAL BANK CREDITOR PENSION LOCAL BOND MARKET INCUMBENT BANKS CENTRAL BANK MATURITY PRIVATE BOND PROTECTION OF INVESTOR PROTECTION OF INVESTORS CREDIT BUREAUS CONTRACTS BOND MARKET CAPITALIZATION RETURN LENDERS LOANS CRISIS COUNTRIES FINANCIAL SYSTEM RULE OF LAW FINANCE RETURN ON ASSETS TAXES EQUITY BANKRUPTCY LAWS INVESTORS DEBT RATIO SOVEREIGN DEBT ASSETS RATIOS VALUE OF ASSETS MARKET CONTAGION TRADE FINANCE BANKING CRISIS FINANCIAL CRISIS ACCESS TO CAPITAL SUPPLY OF CREDIT ASSET RATIOS RETURNS DEBT MATURITY DEBT MATURITIES BOND MARKET WORKING CAPITAL CONTRACT PROPERTY BALANCE SHEET DEFAULT MARKET STOCK MARKET DEVELOPMENT MARKET VALUE CREDIT BUREAU PRODUCTIVE INVESTMENTS AVERAGE DEBT INTERESTS CORPORATE DEBT INVESTOR CORPORATE BONDS BANK CREDIT FIXED ASSETS FINANCIAL DEVELOPMENT BANK LOANS STOCK EXCHANGE BANKING CRISIS INVESTMENT BOND CAPITAL STRUCTURE COMPOSITION OF DEBT SHARE COLLATERAL SHORT‐TERM DEBT FINANCIAL MARKETS DEBT OBLIGATIONS TANGIBLE ASSETS FINANCIAL SHOCKS INSTITUTIONAL DEVELOPMENT EXTERNAL DEBT PROFIT INVESTMENTS ASSETS RATIO BANKING CRISES CAPITAL MARKET FINANCING PROFITS FINANCIAL MARKETS CORPORATE GOVERNANCE MACROECONOMIC INSTABILITY 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. 2016-01-12T21:39:25Z 2016-01-12T21:39:25Z 2015-12 Working Paper http://documents.worldbank.org/curated/en/2015/12/25705513/impact-global-financial-crisis-firms-capital-structure http://hdl.handle.net/10986/23623 English en_US Policy Research Working Paper;No. 7522 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |