Of interest? Estimating the average interest rate on debt across firms and over time

We use tax data from the Longitudinal Business Database to estimate firm-level average interest rate on liabilities. The mean of this measure has similar time series properties official statistics business borrowing rate, while also enabling detailed disaggregation across different firm types. document significant variation in interest across firms different industries, and with different apparent risk. Finally, we compare firms self-reported views whether they are finance-constrained an estimated firm-specific interest premium, showing that: have higher premia than unconstrained firms; that at least part difference premia is explained by level differences risk between constrained firms.