Debt-oriented Capital Structure and Economic Growth

Panel Evidence for OECD Countries

Bibliographic Data

ID12417820
AuthorsSyed Munawar Shah (0000-0002-4427-0470, Balochistan University of Information Technology, Engineering and Management Sciences, corresponding author), Mariani Abdul-Majid (0000-0002-4730-332X, National University of Malaysia), Zulkefly Abdul Karim (0000-0002-6782-3592, National University of Malaysia)
Year2019
Volume27
Issue4
Pages519-542
Publication date2019-06-19
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueEuropean Review (JOURNAL)
Journal identifiersISSN: 1062-7987 • E-ISSN: 1474-0575
PublisherCambridge University Press (CUP) (PUBLISHER)
DOI10.1017/s1062798719000139
OpenAlexW2950719220
LanguageEN
References cited27

This paper examines the relationship between debt-oriented capital structure and economic growth by analysing a panel data of 16 European countries, based on the availability of data. We find that the corporate leverage in financial and non-financial corporations affects economic growth negatively. Furthermore, the results indicate that the leverage in non-financial corporations affects economic growth more than the leverage in financial corporations. This is due to the direct relationship between economic growth and the real sector and the fact that non-financial corporations in OECD countries hold more debt as compared with financial corporations

Business · Capital structure · Debt · Debt ratio · Debt-to-capital ratio · Economics · Financial sector · Financial structure · Financial system · Leverage (statistics · Monetary economics · Panel data · Return on equity · Corporate Finance and Governance · Economic Growth and Productivity · Fiscal Policy and Economic Growth · Finance

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