@article{Gomis:294964,
      recid = {294964},
      author = {Gomis, Roger M. and Khatiwada, Sameer},
      title = {Debt and productivity evidence from firm-level data},
      publisher = {The Graduate Institute, International Economics  Department},
      address = {Geneva. 2017},
      number = {BOOK},
      series = {Graduate Institute of International and Development  Studies Working Paper ; no. 04/2017},
      pages = {35 p. : ill.},
      year = {2017},
      abstract = {There are relatively few studies that use micro data to  shed light on the relationship between finance and economic  growth – the few that exists show that there is a positive  relationship between debt and future productivity growth.  Meanwhile, several new macro-econometric studies have shown  that there is a threshold of financial development above  which finance negatively impacts growth – our paper  contributes to this literature by examining whether this  finding holds when we examine firm level data. Our data  covers over 100 countries, both advanced and developing &  emerging and spans close to 30 years (1986-2014). Our  preliminary results are the following: i) firm level  leverage is positively associated with productivity; ii)  the strength of this association declines in employment of  the firm; iii) there is diminishing returns to leverage in  terms of its impact on productivity but we don't see a  threshold beyond which the returns drop; iv) aggregate  leverage in a country has a negative effect on firm  productivity, controlling for strength of institutions and  level of economic and financial development in the country.  Furthermore, given the potential issue of endogeneity, we  examine the impact of leverage on expected and unexpected  components of productivity – our results show that leverage  is positively associated with the unexpected component of  firm productivity, thus providing evidence against reverse  causality.},
      url = {http://repository.graduateinstitute.ch/record/294964},
      doi = {https://doi.org/10.71609/iheid-tey1-r514},
}