Search engine for discovering works of Art, research articles, and books related to Art and Culture
Javascript must be enabled to continue!
Private Debt, Public Debt, and Capital Misallocation
View through CrossRef
Abstract
The aim of this article is to determine whether increases in private and public indebtedness affect capital misallocation, which is measured as the dispersion in capital returns across firms in different industries. This aim is achieved by using a dataset containing industry-level data for 18 European countries and controlling for macroeconomic indicators representing potential determinants of capital misallocation. The within-country variation across industries regarding indicators such as external finance dependence, technological intensity, credit constraints and competitive structure is used to find that private debt accumulation disproportionately increases capital misallocation in industries with higher financial dependence, higher R&D intensity, a larger share of credit-constrained firms and a lower level of competition. On the other hand, there are no significant and robust effects of public debt on capital misallocation found within the country–sector pairs in the sample.
Title: Private Debt, Public Debt, and Capital Misallocation
Description:
Abstract
The aim of this article is to determine whether increases in private and public indebtedness affect capital misallocation, which is measured as the dispersion in capital returns across firms in different industries.
This aim is achieved by using a dataset containing industry-level data for 18 European countries and controlling for macroeconomic indicators representing potential determinants of capital misallocation.
The within-country variation across industries regarding indicators such as external finance dependence, technological intensity, credit constraints and competitive structure is used to find that private debt accumulation disproportionately increases capital misallocation in industries with higher financial dependence, higher R&D intensity, a larger share of credit-constrained firms and a lower level of competition.
On the other hand, there are no significant and robust effects of public debt on capital misallocation found within the country–sector pairs in the sample.
Related Results
External Debt and Capital Accumulation Nexus: Evidence from Pakistan
External Debt and Capital Accumulation Nexus: Evidence from Pakistan
The rising public debt burden is a common feature of developing countries like Pakistan. This study is an attempt to empirically analyse the external debt and capital accumulation ...
From Confrontation to Cooperation: The London Debt Agreement of 1953 and Later Debt Crises
From Confrontation to Cooperation: The London Debt Agreement of 1953 and Later Debt Crises
From Confrontation to Cooperation: The London Debt Agreement of 1953 and Later Debt Crises The London Debt Agreement of 27 February 1953 managed to solve the complex problem of Ge...
External debt-growth nexus: Empirical evidence from Ethiopian economy
External debt-growth nexus: Empirical evidence from Ethiopian economy
This study is an effort to determine the effect of public external debt on economic growth in Ethiopia. Specifically, the study tries to answer the questions whether stock of publi...
Public Debt and Impact on the Economy: The Case of Albania
Public Debt and Impact on the Economy: The Case of Albania
The purpose of this article is to highlight the effect of public debt on the economy, and whether high budget deficits constitute a real threat to the economy. In general, governme...
Technical Debt in Practice
Technical Debt in Practice
The practical implications of technical debt for the entire software life cycle; with examples and case studies.
Technical debt in software is incurred when develope...
Influence of Rural Social Capital and Production Mode on the Subjective Well-Being of Farmers and Herdsmen: Empirical Discovery on Farmers and Herdsmen in Inner Mongolia
Influence of Rural Social Capital and Production Mode on the Subjective Well-Being of Farmers and Herdsmen: Empirical Discovery on Farmers and Herdsmen in Inner Mongolia
Rural areas are crucial to the realization of sustainable development goals (SDGs). Rural social capital is indispensable for these areas to fulfil the SDGs. As China pursues rural...
The Current State of the Public Debt in Ukraine and Prospects of Using Foreign Experience in Public Debt Management
The Current State of the Public Debt in Ukraine and Prospects of Using Foreign Experience in Public Debt Management
The article is devoted to an important component of the country’s financial security –public debt. The formation of governmental borrowing is caused by the State’s need for additio...
Public Debts’ Component and Crowding Out Effect of Private Domestic Investment in Nigeria
Public Debts’ Component and Crowding Out Effect of Private Domestic Investment in Nigeria
Abstract
The study interrogated the rationale behind the federal government’s continued reliance on Keynesian fiscal policy prescriptions of deficit financing as a way of s...