Although the yield was improved by the mulching treatments the

The current account balance relates directly to the level of competitiveness of an economy. A systematic current account surplus signifies a wealthy and competitive economy: an economy with firms capable of selling tradable assets, of creating value, and of financing their investments by allocating their own resources. We expect the current account balance deficit to have a positive impact on corporate leverage in certain countries, namely in some developing countries, which have become more competitive during the past 20 years. The third economic variable we explore in this Oprozomib paper is GDP growth (see Table A1). For ten developing countries Booth et al. (2001) found that GDP growth had a positive impact on corporate leverage, although without statistical significance. They concluded somatostatin real economic growth in a country will positively influence book leverage, as firms tend to borrow more in periods when there is a prospect of real growth and less during periods driven by an inflationary process. The increase in the monetary value of assets is not compensated by the higher interest rates and concomitant risk. De Jong et al. (2008) showed that economic growth impacts levels of debt and some firm-level variables, namely growth opportunities. In line with these results, we expect GPD growth to be positively associated with corporate leverage.H3.