This study examined the effect of the liquidity of government debt on industry growth using a dataset collected from 22 manufacturing industries in 12 countries between 2000 and 2016. By classifying the countries according to political regimes, the influence of the political regimes on the relationship between government debt and industry growth was assessed. For sectors with higher liquidity needs, changes in industry growth were found to significantly relate to changes in levels of total public debt as well as both domestic and external components of total government debt. The correlation between domestic debt and industry growth was less accentuated in democratic countries, while the effect of external debt was particularly strong in countries classified as autocracies. The significance of both domestic and external debts in governing the variation in industry growth was enhanced in countries with an anocratic form of government.
The Impact of Political Regimes on Government Debt Liquidity and Industry Growth
Post by MSF Chula at Sunday, 10 January 2021 06:07 PM
Last updated at Sunday, 10 January 2021 06:07 PM