The effects of government borrowing on corporate financing: Evidence from Europe

Aytürk, Yusuf

doi:10.1016/j.frl.2016.09.018

Cited by 19 publications

(6 citation statements)

References 17 publications

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“…This theory means that the unsustainable and unclear in macroscopic policies can adversely trigger consequences such as higher inflation, or an increase of the interest rate in capital markets and vice versa. In brief, this phenomenon will be considered as a 'crowd out effect' of private sector borrowing as the study of Terjesen et al (2016), Ayturk (2017). In addition, we also refer to Miller (1977) and Myers (1984) about the theoretical framework in two aspects (i) debt and taxes (ii) capital structure in corporates.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

Monetary Policy, Cash Flow and Corporate Investment: Empirical Evidence from Vietnam

Tran

Hong

et al. 2019

JRFM

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This paper examines the relationships between macroscopic determinants (typically, monetary policies) and microscopic factors (mainly, cash flows and other controlling variables) on corporate investment. By employing system-GMM estimation for the 250 Vietnamese non-financial firms, the authors find that the expansionary monetary policy not only encourages the borrowing activities but also results in more corporate investment activities over the period from 2006 to 2016. Noticeably, the internal cash flow is also significant factor, which enhances the activities of corporate investment. Finally, there are differences between internal cash flow effects on corporate investments between two groups, divided by three theoretical criteria. To recapitulate, our implications highlight the importance of monetary policy stability for sustainable growth in corporate investment in Vietnam.

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Section: Theoretical Frameworkmentioning

confidence: 99%

Monetary Policy, Cash Flow and Corporate Investment: Empirical Evidence from Vietnam

Tran

Hong

et al. 2019

JRFM

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Section: Theoretical Frameworkmentioning

confidence: 99%

Currency Crisis

2019

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Urbana under the supervision of Paul Newbold. His dissertation used quarterly seasonal US data to forecast the performance of the major macroeconomic series. After graduation, he worked at the erstwhile Wharton Econometric Forecast Associates, PA, before joining the ranks of faculty. His current research broadly covers different areas of economics/finance, with implications for public policy.He is currently interested in our opioid crisis, which he considers a real challenge and perhaps the nation's most serious test, requiring immediate public policy intervention by the US government.

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“…As the tax and non-tax revenue fall short in financing government's spending programme, the government announces an annual borrowing programme in the Budget. As stated by Ayturk (2017), bulk of government's fiscal deficit comes from its interest obligation on past debt. If the government resorts to larger borrowings, more than what it has projected, then its interest costs also go up risking higher fiscal deficit.…”

Section: Introductionmentioning

confidence: 99%

Analysis of how Economic Growth in Developing Countries is Influenced by Public Borrowing: A Case Study of Rwanda

Phiri¹,

Tembo²

2022

AJFBM

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Purpose: This study sought to analyze how economic growth in developing countries is influenced by public borrowing referencing on Rwanda as a case study. Methodology: The study used time series data from 1980 to 2018. The study used domestic debt and external debt to analyze how it influences Rwanda’s Gross Domestic Product (GDP). To achieve this objective, secondary data was collected from the National Bank of Rwanda and the debt office in Rwanda. The study employed multiple regression model to identify the relationship between the dependent variable (GDP) and the independent variables (domestic debt and external debt). The t-test was used to confirm the formulated hypotheses at the 5% significance level. Findings: The study found out that a positive relationship exists between IMF Loan and Rwanda’s gross domestic product, while a negative relationship exists between domestic debts and Rwanda’s gross domestic product, which violates the Keynesian theory of public debt. Conclusion: The study concludes that both domestic and external debt significantly affect economic growth in Rwanda. Recommendation: The study recommend that developing countries should develop a good structure of Debt Management Office including a plan for capacity building in order to make its proper debt strategy analysis without external support. The study also recommend developing countries to reduce reliance on internal borrowing to reduce competition between citizens and the government which can reduced economic growth. Furthermore, the study recommend developing countries to account for public debts and ensure that such debts are solely acquired for economic purposes rather that political purposes.

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The effects of government borrowing on corporate financing: Evidence from Europe

Cited by 19 publications

References 17 publications

Monetary Policy, Cash Flow and Corporate Investment: Empirical Evidence from Vietnam

Monetary Policy, Cash Flow and Corporate Investment: Empirical Evidence from Vietnam

Currency Crisis

Analysis of how Economic Growth in Developing Countries is Influenced by Public Borrowing: A Case Study of Rwanda

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