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dc.titleResearch Insights: How Does Debt Affect Corporate Investment in Periods of High Uncertainty?
dc.contributor.authorHeresi, Rodrigo
dc.contributor.authorPowell, Andrew
dc.contributor.orgunitConnectivity, Markets and Finance Division
dc.coverageLatin America and the Caribbean
dc.date.available2023-05-05T00:05:00
dc.date.issue2023-05-05T00:05:00
dc.description.abstractInvestment rates are substantially reduced for firms with higher leverage and higher risk of default. For firms with low risk, higher leverage does not reduce investment; in fact, in these cases we find that higher debt may be associated with higher investment. Economic crises provoke the most problematic debt-overhang problems, and low investment rates can persist for two to three years after the recession has ended.
dc.format.extent4
dc.identifier.doihttp://dx.doi.org/10.18235/0004887
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Research-Insights-How-Does-Debt-Affect-Corporate-Investment-in-Periods-of-High-Uncertainty.pdf
dc.identifier.urlhttps://publications.iadb.org/publications/spanish/document/Perspectivas-de-investigacion-Que-efectos-tiene-el-sobreendeudamiento-en-la-inversion-de-las-empresas-en-periodos-de-alta-incertidumbre.pdf
dc.language.isoen
dc.publisherInter-American Development Bank
dc.subjectInvestment
dc.subjectSmall Business
dc.subjectCoronavirus
dc.subjectRating
dc.subjectPandemics
dc.subjectEconomic Recession
dc.subjectCredit Policy
dc.subjectFinancial Crisis
dc.subjectGlobal Financial Crisis
dc.subjectBank Loan
dc.subjectInvestment Increase
dc.subjectCorporate Debt
dc.subjectDebt Management
dc.subjectInvestment Project
dc.subject.jelcodeE44 - Financial Markets and the Macroeconomy
dc.subject.jelcodeE61 - Policy Objectives • Policy Designs and Consistency • Policy Coordination
dc.subject.jelcodeE62 - Fiscal Policy
dc.subject.jelcodeF34 - International Lending and Debt Problems
dc.subject.jelcodeH87 - International Fiscal Issues • International Public Goods
dc.subject.keywordsInvestment rates;Corporate investment;Debt overhang
dc.typeCatalogs and Brochures
idb.identifier.pubnumberIDB-CB-00756
idb.operationRG-K1089
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