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From Debt Reset to Growth Onset?

Author

Listed:
  • Marin Ferry

    (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12, LEDA-DIAL - Développement, Institutions et Modialisation - LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

  • Luc Jacolin

    (Banque de France - Banque de France - Banque de France, FERDI - Fondation pour les Etudes et Recherches sur le Développement International)

  • Quentin Dufresne

    (Banque de France - Banque de France - Banque de France)

Abstract

Leveraging a unique dataset that combines country-level information on debt restructuring with firm-level data from theWorld Bank Enterprise Surveys (WBES) spanning from 2004 to 2023, we analyze the effects of debt restructuring on firm sales growth. Using recent advancements in difference-in-differences estimation to account for the staggered implementation of restructurings, we find that sovereign debt restructuring increases firm performance by 5–9 percentage points, with stronger effects for private, domestically-owned firms and those reliant on public and financial services. The impact varies by debt type (domestic or external), creditor composition, and implementation speed. Swift external restructurings led by official creditors, such as the Paris Club, yield the most substantial positive effects, whereas other types of restructurings show no significant impact on private sector growth.

Suggested Citation

  • Marin Ferry & Luc Jacolin & Quentin Dufresne, 2025. "From Debt Reset to Growth Onset?," Working Papers hal-05043865, HAL.
    • Handle: RePEc:hal:wpaper:hal-05043865
    Note: View the original document on HAL open archive server: https://hal.science/hal-05043865v1
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