Weighed down by debt? Revisiting the link between corporate debt overhang and investment
BankUnderground
SEPTEMBER 28, 2021
Bruno Albuquerque. I find that persistent debt booms led financially constrained firms to cut back on investment, across both capital expenditures and intangible assets. Vulnerable firms tend to have weaker fundamentals, face high corporate financing costs, have lower ICRs , and invest less ( Albuquerque (2021) ). Main results.
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