Effects of Leverage on Corporate Investment and Hiring Decisions

摘要: The rising indebtedness of the U.S. business sector raises some issues for macroeconomic stabilization policy.1 Recent studies have investigated whether this rise in corporate leverage has increased risk bankruptcies or liquidations economic downturns.2 This article presents evidence that increases at firm level are associated with volatility capital expenditures and employment growth rates. Such a relationship implies an increase average across firms may cause economy to become more vulnerable shocks sensitive changes monetary policy. potential effects assessed by comparing investment patterns different levels indebtedness. highly leveraged shown experienced greater than their