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The Financial Characteristics of Large and Small Firms Before and After the 2008 Stock Market Crash

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  • Daniel Folkinshteyn
  • Gulser Meric

Abstract

The financial crisis of 2008, and the associated bear market lasting from October 2007 to March 2009, has had a significant impact on a broad cross section of firms in the global economy. Of particular interest to us in this study is the effect of this time period on the financial characteristics of firms, with extra focus on debt-related ratios. Using a large sample of U.S. firms from the COMPUSTAT database, we find that firms, on average, come out of the financial crisis with less insolvency and bankruptcy risk, more efficient asset utilization, and more attractive market valuations.

Suggested Citation

  • Daniel Folkinshteyn & Gulser Meric, 2014. "The Financial Characteristics of Large and Small Firms Before and After the 2008 Stock Market Crash," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 8(1), pages 1-16.
    • Handle: RePEc:ibf:ijbfre:v:8:y:2014:i:1:p:1-16
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    References listed on IDEAS

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    More about this item

    Keywords

    Financial Crisis; Financial Ratios;

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G01 - Financial Economics - - General - - - Financial Crises
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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