Fiscal Stimulus Impact on Firms' Profitability During the Global Financial Crisis / Carolina Correa-Caro, Leandro Medina, Marcos Poplawski Ribeiro, Bennett Sutton.

Format:

Book

Government document

Author/Creator:

Correa-Caro, Carolina.

Contributor:

Medina, Leandro.

Poplawski Ribeiro, Marcos.

Sutton, Bennett.

International Monetary Fund, issuing body.

Series:

IMF Working Papers; Working Paper ; No. 2018/251

IMF Working Papers

Language:

English

Subjects (All):

Global Financial Crisis, 2008-2009.

Economic development.

Financial risk management.

Physical Description:

1 online resource (39 pages)

Edition:

1st ed.

Place of Publication:

Washington, D.C. : International Monetary Fund, 2018.

Summary:

Using financial statement data from the Thomson Reuter’s Worldscope database for 22,333 non-financial firms in 52 advanced and emerging economies, this paper examines how fiscal stimulus (i.e., changes in structural deficit) interacted with sectoral business cycle sensitivity affected corporate profitability during the recovery period of the global financial crisis (GFC). Using cross-sectional analyses, our findings indicate that corporate profitability improved significantly after the GFC fiscal stimulus, especially in manufacturing, utilities and retail sectors. Firm size and leverage are also found to be significant in explaining changes in corporate profitability.

Contents:

Cover

Contents

Abstract

I. Introduction

II. Literature Review

III. Methodology

A. Estimation Strategy

B. Measures of Business Cycle Sensitivity and External Financial Dependency

C. Corporate and Macroeconomic Data

D. Descriptive Statistics

IV. Results

A. Baseline Estimation

B. Testing Asymmetric Effects of the Fiscal Stimulus

C. Industry/Sectoral Analysis

D. Expenditure vs Revenue Composition of Stimulus

V. Robustness Tests

A. ILO's Alternative Measure of Discretionary Fiscal Stimulus

B. Measuring Fiscal Stimulus through Government Expenditure Forecast Errors

VI. Concluding Remarks

References

Tables

1. Summary Statistics, Full Sample

2. Summary Statistics, Advanced Economies

3. Summary Statistics, Emerging Market Economies

4. Results for All Countries for Profits

5. Asymmetric effects of Fiscal Stimulus on Firms' Profitability

6a. Horse Race Results Per Sector for Profits

6b. Horse Race Results Per Sector for Profits

7. Expenditure-Based Fiscal Stimulus

Figures

1. Box-Whisker Plots: Profit (EBITDA) to Asset Ratios

2. Box-Whisker Plots: Growth Rate of Total Assets

3. Fiscal Impulse, 2009.

Notes:

Includes bibliographical references.

Description based on publisher supplied metadata and other sources.

Description based on print version record.

ISBN:

9781484386972

1484386973

9781484387016

1484387015

OCLC:

1080077717