{"title":"Uncertainty of fiscal policy and corporate leverage decisions","authors":"Vaneet Bhatia , Bhuvanesh Pareek , Debojyoti Das","doi":"10.1016/j.econlet.2024.111908","DOIUrl":null,"url":null,"abstract":"<div><p>We explore the impact of fiscal policy uncertainty (FPU) on corporate leverage in the context of Chinese firms. The analysis reveals a significant negative association between FPU and leverage, consistent across various leverage measures. Additionally, trade credit, financial distress risk, state ownership, and nonlinear dynamics significantly influence this relationship. These findings offer new insights into the effects of fiscal uncertainty on corporate leverage, highlighting the broader implications for corporate financial strategies.</p></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"243 ","pages":"Article 111908"},"PeriodicalIF":1.8000,"publicationDate":"2024-08-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economics Letters","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0165176524003926","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
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Abstract
We explore the impact of fiscal policy uncertainty (FPU) on corporate leverage in the context of Chinese firms. The analysis reveals a significant negative association between FPU and leverage, consistent across various leverage measures. Additionally, trade credit, financial distress risk, state ownership, and nonlinear dynamics significantly influence this relationship. These findings offer new insights into the effects of fiscal uncertainty on corporate leverage, highlighting the broader implications for corporate financial strategies.
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Many economists today are concerned by the proliferation of journals and the concomitant labyrinth of research to be conquered in order to reach the specific information they require. To combat this tendency, Economics Letters has been conceived and designed outside the realm of the traditional economics journal. As a Letters Journal, it consists of concise communications (letters) that provide a means of rapid and efficient dissemination of new results, models and methods in all fields of economic research.
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