Impact of Supply Chain Disruptions on Financial Leverage

William Ginn () and Jamel Saadaoui
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William Ginn: Labcorp and Coburg University of Applied Sciences

No 2024.11, Working Papers from International Network for Economic Research - INFER

Abstract: This study investigates the impact of supply disruptions on financial leverage (debt-equity ratio) in the U.S. economy from 1998:Q1 to 2024:Q1. The study employs a linear and non-linear Local Projections (LP) and Bayesian Vector Autoregression (BVAR) models to explore dynamic relationships. While the LP models reveal that a supply chain shock negatively affects leverage with statistically significant results, there is no evidence of state dependence. The BVAR model suggest that a supply chain shock is disruptive via reduction (an increase) in output (inflation), accompanied by lower leverage.

Keywords: Supply chain; leverage; local projections; economic conditions; Bayesian VAR (search for similar items in EconPapers)
JEL-codes: F (search for similar items in EconPapers)
Pages: 24 pages
Date: 2024
New Economics Papers: this item is included in nep-fdg
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Citations: View citations in EconPapers (1)

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