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Titel
How does economic policy uncertainty affect corporate debt maturity? / Xiang Li, Dan Su
VerfasserLi, Xiang ; Su, Dan
ErschienenHalle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, [05. Mai 2020]
Umfang1 Online-Ressource (III, 52 Seiten, A9, 2,67 MB) : Diagramme
SpracheEnglisch
SerieIWH-Diskussionspapiere ; 2020, no. 6 (May 2020)
URNurn:nbn:de:gbv:3:2-120365 
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How does economic policy uncertainty affect corporate debt maturity? [2.67 mb]
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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.