SME recovery following a financial crisis: Does debt overhang matter?

Arbeitspapier

The years before the financial crisis saw a dramatic build-up in private debt levels in several countries and this increase was particularly marked in Ireland. In this paper, we look at whether outstanding debt taken out by small and medium sized enterprises in Ireland constrains current performance. We find that the level of debt is generally associated with positive firm performance, facilitating growth and investment. Higher debt burdens (measured as the ratio of debt to turnover), on the other hand, have significant negative effects on all measures of firm performance, in particular investment, employment and indicators of financial distress.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ESRI Working Paper ; No. 491

Classification and Topics

• Classification: Wirtschaft
• Subject: Finanzkrise ; Verbindlichkeiten ; Unternehmenserfolg ; Irland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lawless, Martina ; O'Connell, Brian ; O'Toole, Conor
• Event: Veröffentlichung
• (who): The Economic and Social Research Institute (ESRI)
• (where): Dublin
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/129426
• Last update: 10.03.2025, 11:42 AM CET