Implement strategies that improve your investment and capital structure to improve the performance of your business. The right approach can ensure that you have a suitable amount of debt that will allow you to meet your financial goals and reach the desired results. To improve your skills and improve your knowledge, learn from professionals who have expertise in this field.
The industrialized world has experienced an impressive reduction in leverage over the past decade. However this deleveraging might not be evident in the rate at which fixed assets of corporations are being reinvested. This could be due in part to the slow recovery in the economy or the uncertain investment environment.
To improve businesses’ performance, they often need to undergo restructuring. It could mean adjusting the way they manage their assets and operations, or altering their structure to reduce or consolidate debt or improve their business processes. This can also include moving some of their assets as part of selling or transferring assets, a capital-restructuring technique that could have a significant impact on a firm’s stability.
This paper uses cross country panel data from 33 advanced countries to examine the effects on output gains and capital productivity of corporate restructuring. Utilizing an instrumental variable model we find that periods of systemic of debt reduction (framed as a corporate restructuring dummy) result in a reduction in aggregate firm-level debt and a positive effect on productivity growth through investment and capital productivity. However, this effect is mitigated by the negative impact of restructuring on the labor market and financial markets in the short run.