Fiscal Stimulus Impact on Firms' Profitability During the Global Financial Crisis
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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.
Series:
Working Paper No. 2018/251
Subject:
Business cycles Central bank policy rate Economic growth Expenditure Financial services Fiscal policy Fiscal stimulus
English
Publication Date:
November 28, 2018
ISBN/ISSN:
9781484380659/1018-5941
Stock No:
WPIEA2018251
Pages:
38
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