Debt and Corporate Performance: Evidence from Russian Companies

Student: Ivanushkin Fedor

Faculty: International College of Economics and Finance

Educational Programme: Double degree programme in Economics of the NRU HSE and the University of London (Bachelor)

Year of Graduation: 2016

This paper analyses the relationship between the level of debt and the corporate performance. The measures for corporate performance and the degree of leverage and performance were chosen in accordance with the existing empirical literature on corporate capital structure and performance. The relationship is evaluated using the panel data regression methods based on two samples of Russian public non-financial companies. The results of the estimations provide mixed evidence on the relationship between debt financing and corporate performance. Overall, the level of debt proves to have a significantly negative effect on corporate financial performance. Moreover, the several tests indicated that the relationship between financial leverage and performance might be in fact non-linear.

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