How does economic policy uncertainty affect corporate debt maturity? / Xiang Li, Dan Su
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Discovery
1697224385
URN
urn:nbn:de:gbv:3:2-120365
DOI
ISBN
ISSN
Beiträger
Körperschaft
Erschienen
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, [05. Mai 2020]
Umfang
1 Online-Ressource (III, 52 Seiten, A9, 2,67 MB) : Diagramme
Ausgabevermerk
Sprache
eng
Anmerkungen
Inhaltliche Zusammenfassung
This paper investigates whether and how economic policy uncertainty affects corporate debt maturity. Using a cross-country firm-level dataset for France, Germany, Spain, and Italy from 1996 to 2010, we find that an increase in economic policy uncertainty is significantly associated with a shortened debt maturity. Specifically, a 1% increase in economic policy uncertainty is associated with a 0.22% decrease in the long-term debt-to-assets ratio and a 0.08% decrease in debt maturity. Moreover, the impacts of economic policy uncertainty are stronger for innovation-intensive firms. We use firms' flexibility in changing debt maturity and the deviation to leverage target to gauge the causal relationship, and identify the reduced investment and steepened term structure as transmission mechanisms.
Schriftenreihe
IWH-Diskussionspapiere ; 2020, no. 6 (May 2020) ppn:837399270