Publication: The Impact of the Global Financial Crisis on Firms' Capital Structure
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2015-12
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2016-01-12
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Abstract
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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“Martinez-Peria, Maria Soledad; Demirguc-Kunt, Asli; Tressel, Thierry. 2015. The Impact of the Global Financial Crisis on Firms' Capital Structure. Policy Research Working Paper;No. 7522. © World Bank. http://hdl.handle.net/10986/23623 License: CC BY 3.0 IGO.”
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