Corporate QE in Europe during the COVID-19 crisis and debt overhang
Name:
1-s2.0-S0261560623000566-main.pdf
Size:
719.3Kb
Format:
PDF
Description:
Final Published Version
Publisher
Elsevier LtdCitation
Demirgüç-Kunt, A., Horváth, B. L., & Huizinga, H. (2023). Corporate QE in Europe during the COVID-19 crisis and debt overhang. Journal of International Money and Finance, 135, 102855.Rights
© 2023 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license (https://creativecommons.org/licenses/by/4.0/).Collection Information
This item from the UA Faculty Publications collection is made available by the University of Arizona with support from the University of Arizona Libraries. If you have questions, please contact us at repository@u.library.arizona.edu.Abstract
This paper finds that shareholders of highly leveraged firms benefit relatively less compared to bondholders from the corporate QE announcements by the ECB and the Bank of England, 2020, as evidence of debt overhang. Firms more heavily impacted by the pandemic gain less from corporate QE, which could also reflect debt overhang. The monetary and fiscal responses to the pandemic are complements in the sense that a stronger pandemic-related fiscal response and higher pre-announcement sovereign CDS spreads enhance the positive effects of corporate QE on equity and debt valuations. © 2023 The AuthorsNote
Open access articleISSN
0261-5606Version
Final Published VersionScopus Count
Collections
Except where otherwise noted, this item's license is described as © 2023 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license (https://creativecommons.org/licenses/by/4.0/).