In this paper, we trace the indebtedness of the non-financial corporate sector in Ireland over the period
from 1980 to 2007. This period witnessed an episode of leveraging to 2001, following by a period of
deleveraging to 2007. Our findings suggest that fundamentals can help explain why firms became
more indebted between 1980 and 2001, but the deleveraging that took place after 2001 is due to
factors other than the fundamentals included in our analysis. While we cannot say definitively, our
findings may be in line with evidence which points to a concerted effort on the part of Irish firms to
reduce their debt financing since 2001
