The Financial Wealth of Corporations: A First Look at Sectoral Balance Sheet Data

Yuko Hashimoto and Noriaki Kinoshita

No 2016/011, IMF Working Papers from International Monetary Fund

Abstract: This paper analyzes the nonfinancial corporation (NFC) sector’s financial balance sheets using data available from the OECD. In our sample of 20 advanced economies, corporate debt in percent of GDP—a frequently used indicator in the context of corporate balance sheet adjustments—has remained high since the global financial crisis, with significant differences in the level and the trend between the high-debt and low-debt groups. Looking at financial balance sheets more broadly, including net financial wealth, the NFC sector’s balance sheet conditions have improved recently, particularly reflecting accumulation of corporate cash and valuation gains on financial assets. Longer time series and more granular data for Japan, which has been experiencing a prolonged period of balance sheet adjustments, indicate that a continued strengthening of balance sheets might occur even after debt levels are reduced.

Keywords: WP; debt; economy; balance sheet adjustment; cash; balance sheet data; Nonfinancial corporation; financial balance sheet; net financial wealth; NFC sector; balance sheet condition; cash holding; financial asset accumulation; Financial statements; Currencies; Stocks; Global financial crisis of 2008-2009; Business enterprises; Global (search for similar items in EconPapers)
Pages: 29
Date: 2016-01-26
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Citations: View citations in EconPapers (2)

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