Corporate Leverage In Emes: Did The Global Financial Crisis Change The Determinants?
Speaker(s) Dr. Snehal S Herwadkar, Director, DEPR, Reserve Bank of India Publication Reserve Bank of India, CAFRAL, Mezzanine floor, Main Building, Shahid Bhagat Singh road, Fort, Mumbai 400001
ABSTRACT

Did the global financial crisis change the determinants of corporate leverage in EMEs? This paper attempts to address this issue using a panel-GMM framework and quantile-analysis with a database covering more than 2000 firms in 10 emerging market economies over a 19-year period. We find that, post-crisis, global financial market and macroeconomic conditions facilitated higher corporate leverage. Specifically, global factors such as world GDP growth and the Fed shadow rate have assumed centre stage as determinants of leverage in EMEs, while some traditional drivers like domestic growth and firm-specific factors have become less important in the post-crisis period.


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