QHBK20009ENN.en.pdf
This paper estimates the revenues lost by European firms during the COVID-19 crisis, taking into account different scenarios regarding policy support and the length of the crisis. It examines the likely effect of such revenue losses on firms’ internal financing capacity and on investment, suggesting...
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European Investment Bank
2021
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oapen-20.500.12657-474082023-02-01T08:49:52Z EIB Working Paper 2020/09 - Investment vs debt trade-offs in the post-COVID-19 European economy Pál, Rozália Maurin, Laurent European Investment Bank Business & Economics Finance bic Book Industry Communication::K Economics, finance, business & management::KF Finance & accounting::KFF Finance This paper estimates the revenues lost by European firms during the COVID-19 crisis, taking into account different scenarios regarding policy support and the length of the crisis. It examines the likely effect of such revenue losses on firms’ internal financing capacity and on investment, suggesting that the COVID-19 crisis may trigger an fall in corporate investment greater that that experienced during the Great Financial Crisis, with firms facing a trade-off between reduced investment and greater indebtedness. A macro-model based on historical data also suggests that the decline in corporate investment would likely be within the computed ranges, should the estimated gap in firm revenues materialise as the result of the crisis. 2021-03-19T04:30:36Z 2021-03-19T04:30:36Z 2020 book 9789286148507 https://library.oapen.org/handle/20.500.12657/47408 eng application/pdf Attribution-NonCommercial-NoDerivatives 4.0 International QHBK20009ENN.en.pdf European Investment Bank European Investment Bank https://doi.org/10.2867/417469 https://doi.org/10.2867/417469 66479d04-7b84-49c0-9a4d-db552a3ecc71 9789286148507 Knowledge Unlatched (KU) European Investment Bank open access |
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This paper estimates the revenues lost by European firms during the COVID-19 crisis, taking into account different scenarios regarding policy support and the length of the crisis. It examines the likely effect of such revenue losses on firms’ internal financing capacity and on investment, suggesting that the COVID-19 crisis may trigger an fall in corporate investment greater that that experienced during the Great Financial Crisis, with firms facing a trade-off between reduced investment and greater indebtedness. A macro-model based on historical data also suggests that the decline in corporate investment would likely be within the computed ranges, should the estimated gap in firm revenues materialise as the result of the crisis. |
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European Investment Bank |
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2021 |
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