Skip to content Skip to navigation
University of Warwick
  • Study
  • |
  • Research
  • |
  • Business
  • |
  • Alumni
  • |
  • News
  • |
  • About

University of Warwick
Publications service & WRAP

Highlight your research

  • WRAP
    • Home
    • Search WRAP
    • Browse by Warwick Author
    • Browse WRAP by Year
    • Browse WRAP by Subject
    • Browse WRAP by Department
    • Browse WRAP by Funder
    • Browse Theses by Department
  • Publications Service
    • Home
    • Search Publications Service
    • Browse by Warwick Author
    • Browse Publications service by Year
    • Browse Publications service by Subject
    • Browse Publications service by Department
    • Browse Publications service by Funder
  • Help & Advice
University of Warwick

The Library

  • Login
  • Admin

When does leverage hurt productivity growth? A firm-level analysis

Tools
- Tools
+ Tools

Coricelli, Fabrizio, Driffield, Nigel L., Pal, Sarmistha and Roland, Isabelle (2012) When does leverage hurt productivity growth? A firm-level analysis. Journal of International Money and Finance, Volume 31 (Number 6). pp. 1674-1694. doi:10.1016/j.jimonfin.2012.03.006

Research output not available from this repository, contact author.
Official URL: http://dx.doi.org/10.1016/j.jimonfin.2012.03.006

Request Changes to record.

Abstract

In the wake of the global financial crisis, several macroeconomic contributions have highlighted the risks of excessive credit expansion. In particular, too much finance can have a negative impact on growth. We examine the microeconomic foundations of this argument, positing a non-monotonic relationship between leverage and firm-level productivity growth in the spirit of the trade-off theory of capital structure. A threshold regression model estimated on a sample of Central and Eastern European countries confirms that TFP growth increases with leverage until the latter reaches a critical threshold beyond which leverage lowers TFP growth. This estimate can provide guidance to firms and policy makers on identifying “excessive” leverage. We find similar non-monotonic relationships between leverage and proxies for firm value. Our results are a first step in bridging the gap between the literature on optimal capital structure and the wider macro literature on the finance-growth nexus.

Item Type: Journal Article
Divisions: Faculty of Social Sciences > Warwick Business School > Strategy & International Business
Faculty of Social Sciences > Warwick Business School
Journal or Publication Title: Journal of International Money and Finance
Publisher: Elsevier BV
ISSN: 02615606
Official Date: October 2012
Dates:
DateEvent
October 2012Published
3 April 2012Available
Volume: Volume 31
Number: Number 6
Page Range: pp. 1674-1694
DOI: 10.1016/j.jimonfin.2012.03.006
Status: Peer Reviewed
Publication Status: Published
Access rights to Published version: Restricted or Subscription Access

Request changes or add full text files to a record

Repository staff actions (login required)

View Item View Item
twitter

Email us: wrap@warwick.ac.uk
Contact Details
About Us