Leverage and productivity

• 成果类型: Article
• 署名作者: Li, Huiyu
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - San Francisco
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2021.102752
• 发表日期: 2022
• 关键词: aggregate productivity; misallocation; financial frictions; Earnings-based borrowing

摘要

This paper argues that earnings-based borrowing is important for understanding the extent to which financial frictions lower aggregate productivity (TFP). It builds a general equilibrium model of misallocation due to financial frictions wherein firms borrow by pledging assets and earnings. The model is disciplined to match evidence on aggregate leverage and on the firm-level relationship between leverage and the output-to-capital ratio. Conditional on aggregate leverage, the TFP loss from financial frictions shrinks with the pledgeability of earnings. Similarly, for a given difference in aggregate leverage between two countries, financial frictions may contribute significantly more to TFP differences when the poorer country has lower pledgeability of earnings.