Do debt payments beget debt? Evidence from an emerging market

IF 1.7 Q3 MANAGEMENT

IIMB Management Review Pub Date : 2023-06-01 DOI:10.1016/j.iimb.2023.05.001

Vishnu K. Ramesh , Aravind Sampath

引用次数: 0

Abstract

Do firms generate financial flexibility by retiring debt? Using Indian data, we document that firms channel approximately 39% of current cash flow to repay debt. This higher debt-cash flow sensitivity facilitates firms to maintain investment in the future. Firms prioritise reducing dependency on external finance, increasing investments, and saving cash in the short run. In the long run, firms enhance investments primarily through borrowing. Unlike in developed markets, we find that Indian firms respond symmetrically to positive and negative cash flow shocks by changing their borrowing.

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偿还债务会产生债务吗？来自新兴市场的证据

企业是否通过偿还债务来产生财务灵活性?使用印度的数据，我们证明公司将大约39%的当前现金流用于偿还债务。这种较高的债务-现金流敏感性有助于企业在未来保持投资。企业优先考虑减少对外部融资的依赖，增加投资，并在短期内节省现金。从长期来看，企业主要通过借贷来增加投资。与发达市场不同的是，我们发现印度公司通过改变借贷来对称地应对正现金流和负现金流冲击。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

IIMB Management Review MANAGEMENT-

CiteScore

3.20

自引率

5.90%

发文量

审稿时长

68 days

期刊介绍： IIMB Management Review (IMR) is a quarterly journal brought out by the Indian Institute of Management Bangalore. Addressed to management practitioners, researchers and academics, IMR aims to engage rigorously with practices, concepts and ideas in the field of management, with an emphasis on providing managerial insights, in a reader friendly format. To this end IMR invites manuscripts that provide novel managerial insights in any of the core business functions. The manuscript should be rigorous, that is, the findings should be supported by either empirical data or a well-justified theoretical model, and well written. While these two requirements are necessary for acceptance, they do not guarantee acceptance. The sole criterion for publication is contribution to the extant management literature.Although all manuscripts are welcome, our special emphasis is on papers that focus on emerging economies throughout the world. Such papers may either improve our understanding of markets in such economies through novel analyses or build models by taking into account the special characteristics of such economies to provide guidance to managers.