How does the interest burden affect firm survival ? Evidence from a panel of UK firms during the recent financial crisis

Using a panel of unquoted UK firms over the period 2000-09, we document a significant effect of the interest burden from debt-servicing costs on firm survival. The effect is found to be stronger during the recent financial crisis compared with more tranquil periods. Furthermore, bank-dependent, younger, and non-exporting firms’ survival chances are most… CONTINUE READING