Economic policy uncertainty and capital structure choice: Evidence from China |
| |
| Institution: | 1. Hanken School of Economics, P.O. Box 479, 00101 Helsinki, Finland;2. College of Business Administration, Florida International University, 11200 SW 8th St, Miami, FL 33199, USA;1. Manning School of Business, University of Massachusetts Lowell, 72 University Avenue, Lowell, MA 01854, United States of America;2. Robert C. Vackar College of Business & Entrepreneurship, University of Texas Rio Grande Valley, 1201 W University Dr, Edinburg, TX 78539, United States of America;3. School of Industrial Management, Ho Chi Minh University of Technology, Vietnam National University – Ho Chi Minh City, 268 Ly Thuong Kiet Street, District 10, Ho Chi Minh City, Viet Nam;4. School of Business, University of Connecticut, 2100 Hillside Road, Storrs, CT 06269, United States of America |
| |
| Abstract: | This paper studies how economic policy uncertainty affects corporate capital structure for Chinese listed firms from 2003 to 2013. We show that as the degree of economic policy uncertainty increases, firms tend to lower their leverage ratios. However, firms that are from regions with lower degrees of marketization, are state-owned or have prior bank-firm relationships mitigate the negative effect of policy uncertainty. Moreover, we provide consistent evidence that this negative effect is sourced from the deterioration of the external financing environment. We also find that firms adjust their financing structures by using more trade credit when economic policy uncertainty increases. Our results are robust to sample selection, data frequency, model specification and endogeneity. |
| |
| Keywords: | Economic policy uncertainty Capital structure Trade credit China |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
