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Spring Forward or Fall Back? The Post-Crisis Recovery of Firms

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  • Leandro Medina

Abstract

This paper studies corporate performance in the aftermath of the global crisis by examining 6,581 manufacturing firms in 48 developed and developing countries in 2010, identifying factors of resilience as well as vulnerability. Based on a cross-sectional analysis, the results show that pre-crisis leverage and short-term debt have had negative effects on the speed of the recovery, while asset tangibility has had positive effects. The negative effect of leverage is non-linear, being particularly strong in firms with high pre-crisis leverage. Furthermore, the effects are different for advanced and emerging market economies. The paper also shows that the macroeconomic framework critically matters for firm growth. In particular, in countries that have allowed the exchange rate to depreciate, firms have had a faster recovery in sectors highly dependent on trade.

Suggested Citation

  • Leandro Medina, 2012. "Spring Forward or Fall Back? The Post-Crisis Recovery of Firms," IMF Working Papers 2012/292, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2012/292
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    Cited by:

    1. Golikova Victoria & Kuznetsov Boris, 2016. "The Role of Innovation and Globalization Strategies in Post-Crisis Recovery," HSE Working papers WP BRP 123/EC/2016, National Research University Higher School of Economics.
    2. Mateja Gabrijelčič & Uroš Herman & Andreja Lenarčič, 2016. "Firm Performance and (Foreign) Debt Financing before and during the Crisis: Evidence from Firm-Level Data," Working Papers 15, European Stability Mechanism.
    3. Fabio Landini & Alessandro Arrighetti & Andrea Lasagni, 2020. "Economic crisis and firm exit: do intangibles matter?," Industry and Innovation, Taylor & Francis Journals, vol. 27(5), pages 445-479, May.
    4. Uroš Herman & Tobias Krahnke, 2022. "Determinants and Effects of Countries’ External Capital Structure: A Firm-Level Analysis," IMF Working Papers 2022/038, International Monetary Fund.
    5. Peter Lindner & Sung Eun Jung, 2014. "Corporate Vulnerabilities in India and Banks' Loan Performance," IMF Working Papers 2014/232, International Monetary Fund.
    6. Victoria Golikova & Boris Kuznetsov & Maxim Korotkov & Andrei Govorun, 2017. "Trajectories of Russian manufacturing firms’ growth after the global financial crisis of 2008–2009: the role of restructuring efforts and regional institutional environment," Post-Communist Economies, Taylor & Francis Journals, vol. 29(2), pages 139-157, April.
    7. Carolina Correa-Caro & Leandro Medina & Mr. Marcos Poplawski Ribeiro & Mr. Bennett W Sutton, 2018. "Fiscal Stimulus Impact on Firms' Profitability During the Global Financial Crisis," IMF Working Papers 2018/251, International Monetary Fund.
    8. Ms. Maria Gonzalez, 2012. "Nonfinancial Firms in Latin America: A Source of Vulnerability?," IMF Working Papers 2012/279, International Monetary Fund.
    9. A. Arrighetti & F. Landini & A. Lasagni, 2015. "Firms’economic crisis and firm exit: do intangibles matters?," Economics Department Working Papers 2015-EP04, Department of Economics, Parma University (Italy).
    10. Carolina Correa-Caro & Leandro Medina & Marcos Poplawski-Ribeiro & Bennett Sutton, 2021. "Fiscal Stimulus and Firms’ Sales and Capital Expenditure During the Global Financial Crisis," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 63(3), pages 489-535, September.
    11. Jin, Yuying & Luo, Mingjin & Wan, Chao, 2018. "Financial constraints, macro-financing environment and post-crisis recovery of firms," International Review of Economics & Finance, Elsevier, vol. 55(C), pages 54-67.

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