This paper exploits a panel of 28 European Union (EU) countries between 1995 and 2016 to analyze whether higher debt resulted in lower private investment – the so called debt overhang effect. We deal with the potential endogeneity between private investment and other macroeconomic determinants by applying an instrumental variable approach (GMM). Our results support the debt overhang hypothesis and indicate that this relationship only works through the public debt channel. In our baseline regression, a 10 percentage point increase in public debt reduced private investment by €18.32 billion, given the levels of private investment prevalent in 2016. By contrast, private debt does not appear to be a significant determinant of private investment. These results hold after controlling for a number of factors that might have caused public debt to increase and private investment to decrease. While our analysis focuses on the financial sector channel, we find no evidence that public debt tightens the credit constraints for private firms or worsens the public debt overhang. We also show that government bailouts of the financial sector, which could alleviate financial distress and boost credit provision, do not appear to be effective in mitigating the public debt overhang effect. Finally, we find evidence that the financial openness of a country does alleviate the negative impact of public debt on private investment. This might suggest that attracting foreign capital compensates for a contraction in the domestic pool of financial resources due to higher public debt levels.

本文利用1995年至2016年由28个欧盟国家组成的小组来分析较高的债务是否导致较低的私人投资-所谓的债务过剩效应。我们通过运用工具变量法（GMM）处理私人投资与其他宏观经济决定因素之间的潜在内生性。我们的结果支持债务悬置假设，并表明这种关系仅通过公共债务渠道起作用。在我们的基准回归中，鉴于2016年盛行的私人投资水平，公共债务增加10个百分点会使私人投资减少183.2亿欧元。相比之下，私人债务似乎并不是私人投资的重要决定因素。在控制了许多可能导致公共债务增加和私人投资减少的因素之后，这些结果仍然成立。尽管我们的分析着眼于金融部门渠道，但我们找不到证据表明公共债务收紧了对私人公司的信贷约束或加剧了公共债务的悬置。我们还表明，政府对金融部门的救助似乎无法有效减轻公共债务过剩的影响，但可以缓解金融危机和增加信贷供给。最后，我们发现有证据表明，一国的金融开放确实减轻了公共债务对私人投资的负面影响。这可能表明，由于公共债务水平的提高，吸引外资可以弥补国内金融资源的萎缩。