The impact of the global financial crisis on firms'capital structure
Maria Martinez Peria and
Thierry Tressel ()
No 7522, Policy Research Working Paper Series from The World Bank
Using a data set covering about 277,000 firms across 79 countries over the period 2004-11, this paper examines the evolution of firms'capital structure during the global financial crisis and its aftermath in 2010-11. The study finds that firm leverage and debt maturity declined in advanced economies and developing countries, even in countries that did not experience a crisis. The deleveraging and maturity reduction were particularly significant for privately held firms, including small and medium enterprises. For small and medium-size enterprises, these effects were larger in countries with less efficient legal systems, weaker information-sharing mechanisms, shallower banking systems, and more restrictions on bank entry. In contrast, there is weaker evidence of a significant decline of leverage and debt maturity among firms listed on a stock exchange, which are typically much larger than other firms and likely benefit from the"spare tire"of easier access to capital market financing.
Keywords: Access to Finance; Economic Theory&Research; Bankruptcy and Resolution of Financial Distress; Debt Markets; Emerging Markets (search for similar items in EconPapers)
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