Premium
Persistance de la dette initiale dans la dynamique de l'emploi à long terme des nouvelles entreprises.
Author(s) -
Petrunia Robert
Publication year - 2007
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/j.1365-2966.2007.00434.x
Subject(s) - debt , econometrics , asset (computer security) , economics , persistence (discontinuity) , debt ratio , null hypothesis , monetary economics , monotonic function , financial economics , mathematics , macroeconomics , computer science , mathematical analysis , computer security , geotechnical engineering , engineering
. This paper investigates whether a firm's future growth is independent of its initial debt structure. The non‐parametric test consists of determining whether the conditional size distribution for firms surviving through early years of life depends upon debt‐to‐asset ratio at birth. Initially, I test for initial size dependence in the growth process by applying Pakes and Ericson (1998) procedure. I then test the hypothesis that initial debt‐to‐asset ratios are irrelevant to growth of ten‐year old manufacturing firms. I reject the null of independence, and find evidence of a non‐monotonic relationship between age ten conditional size and the initial debt‐to‐asset ratio.