Risky firms can transmit financial cycle – BIS paper
Authors find smaller, younger firms are more likely to tap into global markets
The actions of small firms in response to changes in risk can help transmit global financing conditions to local economies, according to a working paper published by the Bank for International Settlements.
The authors, Ramon Moreno and José María Serena Garralda, draw on a firm-level, cross-country dataset including companies from 40 small open economies, spanning the period 2000–15.
They find small, young companies, which have to pay a higher risk premium to access global markets, respond
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