The Financing Structure of NonFinancial Corporations and MacroFinancial Implications in France

Stéphane Dées, Stefan Gebauer, Thomas Goncalves and Camille Thubin
Authors registered in the RePEc Author Service: Stephane Dees

Working papers from Banque de France

Abstract: How does the corporate funding mix affect economic and financial stability in France? To address this question, we develop a model for the financing structure of French non-financial corporations (NFCs) and incorporate it in the Banque de France's semi-structural macroeconomic model (FR-BDF). We document that while on average more than half of external financing for French NFCs is provided by bank credit, the share of bond financing has increased markedly after the great Financial Crisis of 2008/2009. We then use the augmented model to simulate several macro-financial stress scenarios and show that the new macro-financial linkages imply a non-negligible financial accelerator effect that affects corporate investment decisions and matters for the transmission of monetary policy. In particular, corporate leverage plays a key role for investment, and we discuss the relative strengThéof shocks affecting the leverage ratio via corporate credit and equity.

Keywords: Semi-Structural Models; Non-Financial Corporation Financing; Corporate Debt. (search for similar items in EconPapers)
JEL-codes: C32 E51 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2022
New Economics Papers: this item is included in nep-cfn, nep-eec, nep-fdg and nep-hme
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:880

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