What Are the Causes of the Growing Trend of Excess Savings of the Corporate Sector in Developed Countries? An Empirical Analysis of Three Hypotheses

What Are the Causes of the Growing Trend of Excess Savings of the Corporate Sector in Developed Countries? An Empirical Analysis of Three Hypotheses

This paper analyzes annual accounting data for a sample of 5,000 publicly traded manufacturing firms from Germany, France, Italy, Japan, and the United Kingdom. The analysis uses data from 1997 to 2011 and finds an increasing trend of excess saving...

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Bibliographic Details
Main Authors: Brufman, Leandro, Martinez, Lisana, Pérez Artica, Rodrigo
Format: Policy Research Working Paper
Language:English
en_US
Published: World Bank, Washington, DC 2013
Subjects:
ACCESS TO CAPITAL
AGENCY COST
AGGREGATE DEMAND
ASSETS RATIO
BALANCE SHEET
BALANCE SHEETS
BANK DEPOSITS
BANKING SYSTEM
BUSINESS CYCLE
BUSINESS CYCLES
BUSINESS ENVIRONMENT
CAPITAL FORMATION
CAPITAL STRUCTURE
CASH DIVIDENDS
CASH FLOW
CASH FLOWS
CASH HOLDINGS
CORPORATE FINANCE
CORPORATE INVESTMENT
CORPORATE SAVINGS
CREDIT CONSTRAINTS
CREDIT CRUNCH
CREDIT RATIONING
DEBT
DEBT REDUCTION
DEVELOPED COUNTRIES
DEVELOPMENT POLICY
DIVERSIFICATION
DIVIDEND
DIVIDEND POLICY
DIVIDENDS
DUMMY VARIABLE
EARNINGS
ECONOMIC ACTIVITY
ECONOMIC CONDITIONS
ECONOMIC CRISIS
ECONOMIC OUTLOOK
EMPIRICAL ANALYSIS
EMPIRICAL EVIDENCE
EMPIRICAL STUDIES
EQUITY MARKET
EQUITY MARKET DEVELOPMENT
EXPENDITURES
FINANCIAL CONSTRAINTS
FINANCIAL CRISES
FINANCIAL CRISIS
FINANCIAL DISTRESS
FINANCIAL INTERMEDIATION
FINANCIAL MANAGEMENT
FINANCIAL POLICIES
FINANCIAL STUDIES
FINANCIAL SYSTEM
GROWTH OPPORTUNITIES
GROWTH POTENTIAL
GROWTH RATE
HOLDING
HOLDINGS
INCOME
INDEBTEDNESS
INSURANCE
INTERNAL FUNDS
INTERNATIONAL BANK
INVESTMENT BEHAVIOR
INVESTMENT DECISIONS
INVESTMENT OPPORTUNITIES
INVESTMENT PROJECTS
LIQUIDITY
LIQUIDITY MANAGEMENT
MACROECONOMIC ENVIRONMENT
MACROECONOMIC UNCERTAINTY
MARKET COMPETITION
MARKET DEVELOPMENT
MERGERS
NATIONAL ACCOUNTING
NATIONAL INVESTMENT
PRIVATE INVESTMENT
RECESSION
RETURN
RETURN ON ASSETS
SAFE ASSETS
SALES GROWTH
SALES_GROWTH
SAVINGS
SHORT-TERM ASSETS
SHORT-TERM DEBT
STOCKS
TAX
TAX BENEFITS
TOTAL_DEBT
TREASURIES
TREASURY
VOLATILE ENVIRONMENT
VOLATILITY
Online Access:http://documents.worldbank.org/curated/en/2013/08/18109370/causes-growing-trend-excess-savings-corporate-sector-developed-countries-empirical-analysis-three-hypotheses
http://hdl.handle.net/10986/16004
Description
Summary:This paper analyzes annual accounting data for a sample of 5,000 publicly traded manufacturing firms from Germany, France, Italy, Japan, and the United Kingdom. The analysis uses data from 1997 to 2011 and finds an increasing trend of excess savings (defined as the difference between gross saving and capital formation) and a gradual decline of gross capital formation. This trend is accompanied by a steady deleveraging process and a decrease in the share of operating assets in total assets. This process is more acute among the more credit constrained, the more volatile, and the less dynamic firms.

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