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On the heterogeneity of the long-term leverage-growth relationship: A cross-country analysis of manufacturing firms

  • Identification data

    Identifier: imarina:9280137
    Handle: https://hdl.handle.net/20.500.11797/imarina9280137
    Authors:
    Cattaruzzo STeruel M
    Abstract:
    Despite a great deal of studies, the relationship between firm leverage and its impact on growth remains still unclear. We offer an analytical framework, which based on a comprehensive literature review and of related empirical reasoning, helps explaining the long-term leverage and firm growth nexus. Both the theoretical views and empirical evidence are mixed, and the lack of consensus may be the result of inconsistent estimation techniques and of the dual interpretation that firm leverage has. Analysing debt from credit institutions to firms in France, Italy, and Spain, and observed from 2010 to 2016, we bring a selection framework to trial. The comparative perspective seeks the establishment of regularities, while the use of a dynamic quantile panel estimator unravels its heterogeneity. Strong non-linearities are detected, but the selection framework finds no support. On the contrary, only firms in the lowest-growing deciles of the growth distributions benefit consistently from leverage.

  • Others:

    Author, as appears in the article.: Cattaruzzo S; Teruel M
    Department: Economia
    URV's Author/s: Cattaruzzo, Sebastiano / Teruel Carrizosa, Mercedes
    Keywords: Quantile Long-term debt Leverage Heterogeneity Firm growth
    Abstract: Despite a great deal of studies, the relationship between firm leverage and its impact on growth remains still unclear. We offer an analytical framework, which based on a comprehensive literature review and of related empirical reasoning, helps explaining the long-term leverage and firm growth nexus. Both the theoretical views and empirical evidence are mixed, and the lack of consensus may be the result of inconsistent estimation techniques and of the dual interpretation that firm leverage has. Analysing debt from credit institutions to firms in France, Italy, and Spain, and observed from 2010 to 2016, we bring a selection framework to trial. The comparative perspective seeks the establishment of regularities, while the use of a dynamic quantile panel estimator unravels its heterogeneity. Strong non-linearities are detected, but the selection framework finds no support. On the contrary, only firms in the lowest-growing deciles of the growth distributions benefit consistently from leverage.
    Thematic Areas: Interdisciplinar Economics and econometrics Economics Economia Ciencias sociales Astronomia / física Administração pública e de empresas, ciências contábeis e turismo
    licence for use: https://creativecommons.org/licenses/by/3.0/es/
    Author's mail: mercedes.teruel@urv.cat
    Author identifier: 0000-0002-4104-7679
    Record's date: 2024-08-03
    Papper version: info:eu-repo/semantics/publishedVersion
    Licence document URL: https://repositori.urv.cat/ca/proteccio-de-dades/
    Papper original source: Structural Change And Economic Dynamics. 62 552-565
    APA: Cattaruzzo S; Teruel M (2022). On the heterogeneity of the long-term leverage-growth relationship: A cross-country analysis of manufacturing firms. Structural Change And Economic Dynamics, 62(), 552-565. DOI: 10.1016/j.strueco.2022.06.011
    Article's DOI: 10.1016/j.strueco.2022.06.011
    Entity: Universitat Rovira i Virgili
    Journal publication year: 2022
    Publication Type: Journal Publications

  • Keywords:

    Economics,Economics and Econometrics
    Quantile
    Long-term debt
    Leverage
    Heterogeneity
    Firm growth
    Interdisciplinar
    Economics and econometrics
    Economics
    Economia
    Ciencias sociales
    Astronomia / física
    Administração pública e de empresas, ciências contábeis e turismo

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