Did Canada Survive the Financial Crisis Better than the United States?

Abstract

This paper compares and contrasts the influence of leverage on firm performance between the United States and Canada. By analyzing 10 largest oil & gas companies each from Canada and the US, we find that leverage has a negative impact on firm performance for both these countries. Moreover, we find strong evidence that the performance gap between high and low leverage firms is lower in Canada, and the results are prominent during the financial crisis of the last decade.