Corporate debt structure and economic recoveries

Thomas Grjebine, Urszula Szczerbowicz and Fabien Tripier

European Economic Review, 2018, vol. 101, issue C, 77-100

Abstract: This paper analyzes the business cycle behavior of the corporate debt structure and its interaction with economic recovery. The debt structure is measured as the share of bonds in the total credit to non-financial corporations for a quarterly panel of countries over the period 1989–2013. We first show that the substitution of loans for bonds in recoveries is a regular property of business cycles. Secondly, we provide evidence that economies with high bond share and important bond-loan substitution recover from the recessions faster. This identified link between corporate debt structure and business cycles is robust to the inclusion of traditional factors which shape recessions and recovery such as the size and the quality of financial markets, the occurrence of bank crisis, the dynamics of credit, and the distribution of firm size.

Keywords: Corporate debt; Bonds markets; Banking; Business cycles; Recovery; Financial frictions (search for similar items in EconPapers)
JEL-codes: E3 E4 G1 G2 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0014292117301770
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Corporate debt structure and economic recoveries (2018)
Working Paper: Corporate Debt Structure and Economic Recoveries (2017)
Working Paper: Corporate Debt Structure and Economic Recoveries (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:101:y:2018:i:c:p:77-100

DOI: 10.1016/j.euroecorev.2017.09.013

Access Statistics for this article

European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer

More articles in European Economic Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().