Estimating the Borrowing Behavior of French and German Firms An Econometric Analysis
AbstractThis paper investigates the borrowing behavior of 2,900 French and 1,300 German firms over the 1987-95 period. Both samples based on data sets of the Banque de France and the Deutsche Bundesbank not only include large but also small and medium-sized enterprises. Applying GMM techniques, we estimate identical debt equations for the two total samples and by size class. Despite the large differences between the two countries in term of debt trends over time and size class the main result is the similarity of a few determinants between France and Germany. E.g. we find that firm growth has a positive impact on borrowing according to the theory of signalling whereas the negative correlation of profit and debt supports pecking order approach and the cost of finance has a negative impact on leverage, too. Additionally, the study can provide some insights for the monetary transmission mechanism in both EMU member countries.
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Bibliographic InfoArticle provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.
Volume (Year): 221 (2001)
Issue (Month): 5-6 ()
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Corporate finance; borrowing behavior; monetary policy; panel data;
Find related papers by JEL classification:
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
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- Butzen, Paul & Fuss, Catherine & Vermeulen, Philip, 2001.
"The interest rate and credit channels in Belgium: An investigation with micro-level firm data,"
10th International Conference on Panel Data, Berlin, July 5-6, 2002
A3-1, International Conferences on Panel Data.
- Paxil Butzen & Catherine Fuss & Philip Vermeulen, 2002. "The interest rate and crédit channels in Belgium: an investigation with micro-level firm data," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 45(3), pages 5-36.
- Paul Butzen & Catherine Fuss & Philip Vermeulen, 2001. "The interest rate and credit channels in Belgium: an investigation with micro-level firm data," Working Paper Research 18, National Bank of Belgium.
- Butzen, Paul & Fuss, Catherine & Vermeulen, Philip, 2001. "The interest rate and credit channel in Belgium: an investigation with micro-level firm data," Working Paper Series 0107, European Central Bank.
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