The debt of Italian non-financial firms: an international comparison

Antonio De Socio () and Paolo Finaldi Russo ()

No 308, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: In the run-up to the financial crisis Italian firms significantly increased their debt in absolute terms and in relation to equity and GDP. The positive gap in firms� leverage between Italy and other euro-area countries has widened in recent years, despite the outstanding debt of Italian firms has decreased since 2011. In this work we document the magnitude of this gap using both aggregate macro data and firm-level information. We find that, controlling for several firm-specific characteristics (i.e. age, profitability, asset tangibility, asset liquidity, turnover growth), the leverage of Italian firms is about 10 percentage points higher than in other euro area countries. Differences are systematically larger among micro and small firms, whereas they are small and weakly significant for firms with assets above 300 million euros.

Keywords: leverage; financial structure; euro area (search for similar items in EconPapers)
JEL-codes: G32 (search for similar items in EconPapers)
Date: 2016-02
New Economics Papers: this item is included in nep-eec and nep-sbm
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_308_16

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