Published on June 3, 2026 – Updated on June 3, 2026
Location
Pôle Tertiaire - Site La Rotonde - 26 avenue Léon Blum - 63000 Clermont-Ferrand
Room 212

Research Seminar. From Debt Reset to Growth Onset? Sovereign Debt Restructuring and Firm Performance in Developing Countries

Marin Ferry
Université Gustave Eiffel, ERUDITE

Coauthors: Luc Jacolin et Quentin Dufresne (Banque de France)

Abstract

Leveraging a unique dataset that combines country-level information on debt restructuring with firm-level data from the World Bank Enterprise Surveys (WBES) spanning 2004–2023, we analyze the effects of debt restructuring on firm sales growth. Using recent advances in difference-in-differences estimation to account for the staggered implementation of restructurings, we find that sovereign debt restructuring increases firm performance by 5–9 percentage points, with stronger effects for private, domestically owned firms and those reliant on public and financial services. The impact varies by debt type (domestic or external), creditor composition, and implementation speed. Swift external restructurings led by official creditors, such as the Paris Club, yield the most substantial positive effects, whereas other types of restructurings show no significant impact on private-sector growth.