What effect does companies’ debt have on their behaviour?

Studies on the effects of corporate debt on corporate behaviour (in particular investment) or on growth have reached divergent findings. 1 We compare OECD countries to try to find out whether or not high corporate debt (as will be the case after the COVID crisis) is a problem. We find that a high corporate debt ratio in OECD countries is not associated with any negative trend in investment, employment, productivity, R&D spending or automation. So there is no macroeconomic indicator that suggests that high corporate debt is negative in the long term. 1 O. Jordà, M. Kornejew, M. Schularick, A. Taylor, “Zombies at large? Corporate debt overhang and the macroeconomy”, CEPR Discussion Paper no. 15518, December 2020: corporate debt booms lead to no negative effects. R.N. Banerjee, B. Hofmann, “Corporate zombies: Anatomy and life cycle”, BIS Working Paper no. 882, September 2020: zombie firms invest less in physical and intangible capital, their performance is persistently weak and their productivity is low .