Real Effects of Financial Distress: The Role of Heterogeneity

• 成果类型: Article
• 署名作者: Buera, Francisco; Karmakar, Sudipto
• 署名单位: Washington University (WUSTL); Bank of England
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1093/ej/ueab083
• 发表日期: 2022
• 页码: 1309-1348
• 关键词: credit crunch; EMPLOYMENT; INVESTMENT; shocks

摘要

Which firms are more sensitive to an aggregate financial shock? What can be learnt from these heterogeneous responses? We evaluate and answer these questions from both empirical and theoretical perspectives. Using microdata from Portugal during the sovereign debt crisis we find that highly leveraged firms and firms with a larger share of short-term debt on their balance sheets contracted more in the aftermath of the financial shock. We analyse the conditions under which leverage and debt maturity determine the sensitivity of firms' investment decisions to financial shocks in standard models of investment under financial frictions. In doing so, we extend these models to feature a maturity choice. We show that simple versions of these models are not consistent with the observed heterogeneous responses. The model needs the presence of frictions when issuing long-term debt to rationalise the empirical findings.