1. The Impact of the Global Financial Crisis on Firms' Capital Structure
- Author
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Demirguc-Kunt, Asli, Martinez-Peria, Maria Soledad, and Tressel, Thierry
- Subjects
LOAN DATA ,INVESTMENT ,TOTAL DEBT ,COUNTRY RISK ,DEBT OVERHANG ,SHAREHOLDERS ,ECONOMIC RISK ,DEPOSIT ,LIQUIDATION ,LOCAL BOND MARKET ,INSTITUTIONAL DEVELOPMENT ,INVESTMENTS ,FINANCIAL INFRASTRUCTURE ,INDIVIDUAL LOAN ,STOCK ,PROTECTION OF INVESTORS ,RETURNS ,PENSION ,INVESTORS ,COLLATERAL ,BONDS ,TRANSACTIONS ,DEBT RATIOS ,FINANCIAL SYSTEMS ,INTERESTS ,TRANSPARENCY ,MARKET CAPITALIZATION ,EMERGING MARKETS ,MORTGAGE ,FINANCIAL MARKETS ,CORPORATE INVESTMENT ,ASSET RATIOS ,SOVEREIGN DEBT ,BORROWERS ,MARKETS ,ASSETS RATIO ,CREDITORS ,PROFIT ,LOAN MATURITIES ,STOCK MARKET CAPITALIZATION ,CORPORATE GOVERNANCE ,PROPERTY RIGHTS ,INDEBTEDNESS ,BALANCE SHEET ,INVESTOR PROTECTION ,LIQUIDITY ,SMALL BUSINESS ,BOND MARKET CAPITALIZATION ,MARKET ,WORKING CAPITAL ,PROPERTY ,DEBT OBLIGATIONS ,CASH FLOW ,BANKING SYSTEMS ,AVERAGE DEBT ,TANGIBLE ASSETS ,DEBT OUTSTANDING ,FIXED ASSETS ,BANK ENTRY ,SHORT‐TERM DEBT ,BANKRUPTCY ,POLITICAL ECONOMY ,LENDERS ,LEGAL SYSTEM ,RETURN ON ASSETS ,DEBT RATIO ,DEBT ISSUES ,CAPITAL MARKETS ,FINANCIAL CRISES ,FINANCIAL INFRASTRUCTURES ,FINANCIAL SYSTEM ,INVESTMENT DECISIONS ,GOOD ,CREDIT BUREAUS ,BOND MARKET ,BOND ,PRIVATE CREDIT ,DEBT SECURITIES ,DUMMY VARIABLES ,EQUITY MARKET ,DEBT FINANCING ,MACROECONOMIC INSTABILITY ,TRADE FINANCE ,LOAN ,BANKING CRISES ,DEBT CRISIS ,BANK CREDIT ,FINANCIAL DEVELOPMENT ,DEVELOPING COUNTRIES ,SECURITIES ,MATURITY ,FUTURE ,LOAN TERMS ,LEGAL SYSTEMS ,ACCESS TO CAPITAL ,ISSUANCE ,CONTRACTS ,INVESTOR ,MARKET INFRASTRUCTURE ,CAPITALIZATION ,MARKET CONTAGION ,MARKET ACCESS ,MINORITY SHAREHOLDERS ,MATURITY STRUCTURE ,TAX ,STOCK MARKET ,BANKING SYSTEM ,CAPITAL STRUCTURE ,EQUITY FINANCING ,MATURITIES ,CREDITOR ,LENDING ,SUPPLY OF CREDIT ,LONG‐ TERM DEBT ,BAILOUT ,INTERNATIONAL DEBT ,RULE OF LAW ,FINANCIAL CRISIS ,SHAREHOLDER ,CAPITAL MARKET FINANCING ,CRISIS COUNTRY ,DEBT MATURITY ,DEBT CONTRACT ,PRIVATE BOND ,LOANS ,DISCLOSURE REQUIREMENTS ,BANKING CRISIS ,INVESTMENT OPPORTUNITIES ,DEPOSIT MONEY BANKS ,FINANCE ,STOCK MARKET DEVELOPMENT ,EXTERNAL DEBT ,LIABILITIES ,CREDIT BUREAU ,STOCK EXCHANGE ,MARKET VALUE ,MARKET CAP ,INTERNATIONAL DEBT SECURITIES ,DUMMY VARIABLE ,DEBT ,ASYMMETRIC INFORMATION ,VALUE OF ASSETS ,LONG‐TERM DEBT ,ASSET RATIO ,BOND MARKETS ,DEFAULT PROBABILITIES ,BANKRUPTCY PROCEDURES ,CRISIS COUNTRIES ,TRADE CREDIT ,OWNERSHIP STRUCTURE ,CONTRACT ENFORCEMENT ,FIRM PERFORMANCE ,CENTRAL BANK ,RETURN ,MARKET ANALYSTS ,CAPITAL MARKET ,CORPORATE DEBT ,PROFIT OPPORTUNITIES ,EXCHANGE ,ACCOUNTING ,INCUMBENT BANKS ,MARKET DEVELOPMENT ,CREDIT INFORMATION ,PRIVATE CREDIT BUREAU ,ASSETS RATIOS ,TURNOVER ,CORPORATE BONDS ,TAXES ,EQUITY ,FINANCIAL SHOCKS ,CAPITAL STRUCTURES ,BANK LOANS ,MARKET CONDITIONS ,INTERNATIONAL BANKS ,PROTECTION OF INVESTOR ,POSITIVE COEFFICIENTS ,GLOBAL FINANCE ,DEFAULT ,PROFITS ,COMPOSITION OF DEBT ,LOAN SPREADS ,INTERNATIONAL BANK ,BANKRUPTCY LAWS ,STOCK MARKETS ,CONTRACT ,PRODUCTIVE INVESTMENTS ,CREDITOR RIGHTS ,INTEREST ,EXTERNAL FINANCE ,INTANGIBLE ,ENTRY REQUIREMENTS ,CASH FLOWS ,SHARE ,BANKRUPTCY LAW ,DEBT MATURITIES - 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.
- Published
- 2015