Government debt and corporate leverage

Detalhes bibliográficos
Autor(a) principal: Demirci, Irem
Data de Publicação: 2019
Outros Autores: Huang, Jennifer, Sialm, Clemens
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: https://doi.org/10.1016/j.jfineco.2019.03.009
Resumo: We empirically investigate the impact of government debt on corporate financing decisions in an international setting. We show a negative relation between government debt and corporate leverage using data on 40 countries between 1990–2014. This negative relation is stronger for government debt that is financed domestically, for firms that are larger and more profitable, and in countries with more developed equity markets. To address potential endogeneity concerns, we use an instrumental variable approach based on military spending and a quasi-natural experiment based on the introduction of the Euro currency. Our findings suggest that government debt crowds out corporate debt.
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spelling Government debt and corporate leverageinternational evidenceCapital structureCrowding outGovernment debtAccountingFinanceEconomics and EconometricsStrategy and ManagementWe empirically investigate the impact of government debt on corporate financing decisions in an international setting. We show a negative relation between government debt and corporate leverage using data on 40 countries between 1990–2014. This negative relation is stronger for government debt that is financed domestically, for firms that are larger and more profitable, and in countries with more developed equity markets. To address potential endogeneity concerns, we use an instrumental variable approach based on military spending and a quasi-natural experiment based on the introduction of the Euro currency. Our findings suggest that government debt crowds out corporate debt.NOVA School of Business and Economics (NOVA SBE)RUNDemirci, IremHuang, JenniferSialm, Clemens2022-06-14T00:31:53Z2019-08-012019-08-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttps://doi.org/10.1016/j.jfineco.2019.03.009eng0304-405XPURE: 12985386http://www.scopus.com/inward/record.url?scp=85064276155&partnerID=8YFLogxKhttps://doi.org/10.1016/j.jfineco.2019.03.009info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2024-03-11T04:37:38Zoai:run.unl.pt:10362/84418Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-20T03:36:29.062091Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv Government debt and corporate leverage
international evidence
title Government debt and corporate leverage
spellingShingle Government debt and corporate leverage
Demirci, Irem
Capital structure
Crowding out
Government debt
Accounting
Finance
Economics and Econometrics
Strategy and Management
title_short Government debt and corporate leverage
title_full Government debt and corporate leverage
title_fullStr Government debt and corporate leverage
title_full_unstemmed Government debt and corporate leverage
title_sort Government debt and corporate leverage
author Demirci, Irem
author_facet Demirci, Irem
Huang, Jennifer
Sialm, Clemens
author_role author
author2 Huang, Jennifer
Sialm, Clemens
author2_role author
author
dc.contributor.none.fl_str_mv NOVA School of Business and Economics (NOVA SBE)
RUN
dc.contributor.author.fl_str_mv Demirci, Irem
Huang, Jennifer
Sialm, Clemens
dc.subject.por.fl_str_mv Capital structure
Crowding out
Government debt
Accounting
Finance
Economics and Econometrics
Strategy and Management
topic Capital structure
Crowding out
Government debt
Accounting
Finance
Economics and Econometrics
Strategy and Management
description We empirically investigate the impact of government debt on corporate financing decisions in an international setting. We show a negative relation between government debt and corporate leverage using data on 40 countries between 1990–2014. This negative relation is stronger for government debt that is financed domestically, for firms that are larger and more profitable, and in countries with more developed equity markets. To address potential endogeneity concerns, we use an instrumental variable approach based on military spending and a quasi-natural experiment based on the introduction of the Euro currency. Our findings suggest that government debt crowds out corporate debt.
publishDate 2019
dc.date.none.fl_str_mv 2019-08-01
2019-08-01T00:00:00Z
2022-06-14T00:31:53Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
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status_str publishedVersion
dc.identifier.uri.fl_str_mv https://doi.org/10.1016/j.jfineco.2019.03.009
url https://doi.org/10.1016/j.jfineco.2019.03.009
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv 0304-405X
PURE: 12985386
http://www.scopus.com/inward/record.url?scp=85064276155&partnerID=8YFLogxK
https://doi.org/10.1016/j.jfineco.2019.03.009
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
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instacron_str RCAAP
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collection Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
repository.name.fl_str_mv Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
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