Guariglia, A., Spaliara, M. E. and Tsoukas, S. (2016) To what extent does the interest burden affect firm survival? Evidence from a panel of UK firms during the recent financial crisis. Oxford Bulletin of Economics and Statistics, 78(4), pp. 576-594. (doi: 10.1111/obes.12120)
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Abstract
Using a panel of mainly unquoted UK firms over the period 2000–09, we document a significant effect of changes in the interest burden from debt-servicing on firm survival. The effect is found to be stronger during the recent financial crisis compared with more tranquil periods. Furthermore, the survival chances of bank-dependent, younger, and non-exporting firms are most affected by changes in the interest burden, especially during the crisis. Our results are robust to using different estimation methods and different interest burden measures They suggest that one way for policymakers to mitigate the effects of financial crises by limiting firm failures would be to prevent financing costs from rising, especially for those firms more likely to face liquidity constraints.
Item Type: | Articles |
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Status: | Published |
Refereed: | Yes |
Glasgow Author(s) Enlighten ID: | Tsoukas, Professor Serafeim and Spaliara, Professor Marina Eliza and Guariglia, Professor Alessandra |
Authors: | Guariglia, A., Spaliara, M. E., and Tsoukas, S. |
College/School: | College of Social Sciences > Adam Smith Business School > Economics |
Journal Name: | Oxford Bulletin of Economics and Statistics |
Publisher: | John Wiley & Sons Ltd. |
ISSN: | 0305-9049 |
ISSN (Online): | 1468-0084 |
Published Online: | 18 November 2015 |
Copyright Holders: | The Department of Economics, University of Oxford and John Wiley and Sons Ltd |
First Published: | First published in Oxford Bulletin of Economics and Statistics 78(4):567-594 |
Publisher Policy: | Reproduced in accordance with the copyright policy of the publisher |
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