Corporate leverage in EMEs: did the global financial crisis change the determinants?
Snehal S Herwadkar
No 681, BIS Working Papers from Bank for International Settlements
This paper evaluates whether the GFC was instrumental in changing the determinants of corporate leverage in EMEs. This issue is addressed using a panel-GMM framework and quantile analysis with a database comprising more than 2,000 firms in 10 EMEs over a 19-year period. We find that, post-GFC, global financial market and macroeconomic conditions facilitated build-up of corporate leverage. Specifically, global factors, such as the growth of world GDP and the FED shadow rate, have assumed centre stage as determinants of leverage in EMEs. At the same time, some traditional drivers, such as domestic growth and firm-specific factors, have become less important.
Keywords: dynamic capital structure; corporate leverage; emerging market economies; global financial crisis (search for similar items in EconPapers)
JEL-codes: G30 G32 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:bis:biswps:681
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