This paper analyzes the influence of financial distress on the investment behavior of companies. The analysis includes companies from Germany, Canada, Spain, France, Italy, UK and USA, which cover a wide spectrum of different institutional environments. The methodology used is panel data estimation using the Generalized Method of Moments (System-GMM), thereby allowing control of both unobservable heterogeneity and the problems of endogeneity in explanatory variables. The results show that the influence of financial distress on investment is different according to the investment opportunities available to companies. So, companies in difficulties with fewer opportunities have the greatest propensity to under-invest, while firms in difficulties with better opportunities do not present different investment behavior than healthy companies.
This article empirically analyses the reasons for crises in microfinance institutions (MFIs), using a sample of 832 MFIs from 74 countries for the period 2003-2011. The methodology used is logit analysis with panel data. The main results show that both internal and external factors influence the probability of a crisis. We find different factors that reduce the likelihood of a crisis (company's performance, country's economic growth, political stability, and existence of a private credit bureau). On the other hand, excessive liquidity, a higher proportion of deposits over loans and more loans per employee all increase the probability of a crisis.
This article analyses how financial development affects the bank lending channel in developing countries. Our analysis is carried out on a sample of 693 commercial banks from 31 developing countries between 2000 and 2012. We find that the loan supply of banks that operate in countries with less
The purpose of this article is to analyze how sovereign risk influences the use of trade credit, both directly and through monetary policy. In addition, we test whether these effects differ during the crisis as compared to before the crisis. Using a sample of 45,864 Eurozone firms (2005-2012), we find that trade credit received increases when sovereign risk becomes higher, but only before the crisis. However, during the crisis, trade credit supply decreases as sovereign risk increases. Additionally, monetary restrictions only lead to an increase in trade credit in low or moderate sovereign risk countries.
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