Risky firms can transmit financial cycle – BIS paper

Authors find smaller, younger firms are more likely to tap into global markets

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The actions of small firms in response to changes in risk can help transmit global financing conditions to local economies, according to a working paper published by the Bank for International Settlements.

The authors, Ramon Moreno and José María Serena Garralda, draw on a firm-level, cross-country dataset including companies from 40 small open economies, spanning the period 2000–15.

They find small, young companies, which have to pay a higher risk premium to access global markets, respond

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