Excess Leverage and Productivity Growth in Emerging Economies: Is There A Threshold Effect?

Fabrizio Coricelli, ,, Sarmistha Pal and Isabelle Roland
Authors registered in the RePEc Author Service: Nigel L. Driffield

No 7617, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper studies the relationship between leverage and growth, focusing on a large sample of firms in emerging economies of central and eastern Europe (CEE). Contrary to the general wisdom, we find that deviation from optimal leverage, especially excess leverage, is common among firms in many CEE countries. Using firm-level panel data, the paper provides support to the hypothesis that leverage positively affects productivity growth but only below an endogenously determined threshold level.

Keywords: Excess leverage; Tfp growth; Threshold model (search for similar items in EconPapers)
JEL-codes: G32 O16 (search for similar items in EconPapers)
Date: 2009-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Working Paper: Excess Leverage and Productivity Growth in Emerging Economies: Is There A Threshold Effect? (2010)
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