Boost Business Performance Through Capital Investment and Restructuring

Improve your business’s performance by implementing strategies that improve the method you invest and arrange your capital. A well-planned approach will ensure that you keep a proper amount of debt to allow you to reach your financial goals, and achieve your desired outcomes. Learn from experts in this field to develop the skills you need and improve your knowledge.

The past decade has seen an important deleveraging process in the industrialized world, however this deleveraging is probably not yet evident in the rate of investment growth in fixed assets of corporates and could be due to the continuing weak economic recovery and uncertain investment environment.

To boost businesses’ performance, they often need to undergo restructuring. It could mean adjusting the way they use their assets as well as operations, or changing their structure to reduce or consolidate debt or enhance their business operations. This may also include the transfer of some of their assets in the course of an exchange or sale of assets, which is a technique for capital restructuring that can have a significant impact on the stability of a company.

This paper draws on cross-country panel data from 33 advanced economies to analyze the effects of corporate restructuring on output growth and capital productivity. Utilizing an instrumental variable model, we find that periods of systemic of debt reduction (framed as a corporate restructuring dummy) lead to a decline in aggregate firm-level debt and an increase in output growth through investment as well as capital productivity. However, this effect is mitigated by the negative effects of restructuring on the labor market and financial markets.

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