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Dluh nefinančních korporací a ekonomický růst
[Debt of Nonfinancial Corporations and Economic Growth]

Author

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  • Vratislav Izák

Abstract

The recent financial and economic crisis has put considerable strains not only on public but also on private finances. In the paper we analyse the development of nonfinancial corporate debt (measured as liabilities minus shares and other equities) in the time period 1995-2010 for 17 European OECD countries. In growth equations the dependent variable is the growth rate of real GDP per head and forward moving averages of this growth rate. Descriptive statistics reveal that in the examined period the nonfinancial corporations' debt has been rising steadily (first of all in Sweden, the Netherlands and Portugal). The basic estimation technique has been panel fixed effects corrected for heteroscedasticity and autocorrelation. The coefficients showing the impacts of corporate debt on GDP growth have had the sign minus and have been highly statistically significant. A 10 percentage point increase in nonfinancial corporations' debt has been associated with an approximately 5 basis point reduction in per head real GDP growth. We have used also cross-section specific and period specific coefficients to gain a more profound look into the matter.

Suggested Citation

  • Vratislav Izák, 2013. "Dluh nefinančních korporací a ekonomický růst [Debt of Nonfinancial Corporations and Economic Growth]," Politická ekonomie, Prague University of Economics and Business, vol. 2013(2), pages 171-187.
    • Handle: RePEc:prg:jnlpol:v:2013:y:2013:i:2:id:893:p:171-187
    DOI: 10.18267/j.polek.893
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    More about this item

    Keywords

    economic growth; fixed effects model; nonfinancial corporation debt; financial balance sheets;
    All these keywords.

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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