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Economic policy uncertainty and capital structure choice: evidence from China
Citation
Zhang, G and Han, J and Pan, Z and Huang, H, Economic policy uncertainty and capital structure choice: evidence from China, Economic Systems, 39, (3) pp. 439-457. ISSN 0939-3625 (2015) [Refereed Article]
Copyright Statement
Copyright 2015 Elsevier B.V.
DOI: doi:10.1016/j.ecosys.2015.06.003
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
Item Details
| Item Type: | Refereed Article |
|---|---|
| Keywords: | economic policy uncertainty, capital structure, trade credit, China |
| Research Division: | Commerce, Management, Tourism and Services |
| Research Group: | Banking, finance and investment |
| Research Field: | Finance |
| Objective Division: | Commercial Services and Tourism |
| Objective Group: | Financial services |
| Objective Field: | Finance services |
| UTAS Author: | Han, J (Mr Jianlei Han) |
| ID Code: | 118518 |
| Year Published: | 2015 |
| Web of Science® Times Cited: | 106 |
| Deposited By: | TSBE |
| Deposited On: | 2017-07-13 |
| Last Modified: | 2017-08-28 |
| Downloads: | 0 |
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