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Economic policy uncertainty and cost of debt financing: International evidence
The North American Journal of Economics and Finance ( IF 3.136 ) Pub Date : 2021-03-20 , DOI: 10.1016/j.najef.2021.101419
Quoc Trung Tran

Prior research shows that economic policy uncertainty affects a wide range of corporate financial decisions; however, there is little research on the relationship between economic policy uncertainty and cost of debt financing across countries. In this paper, we argue that economic policy uncertainty affects cost of debt financing through two mechanisms including information asymmetry and default risk. With a sample of 163,243 firm-years across 17 countries from 2003 to 2016, we find that economic policy uncertainty positively affects cost of debt financing and this effect is stronger during the global financial crisis from 2008 to 2009. Moreover, our research findings show that large firms’ debt financing cost is less affected by economic policy uncertainty.



中文翻译:

经济政策的不确定性和债务融资成本:国际证据

先前的研究表明,经济政策的不确定性会影响广泛的公司财务决策。但是,很少有关于各国经济政策不确定性与债务融资成本之间关系的研究。在本文中,我们认为经济政策的不确定性通过信息不对称和违约风险这两种机制影响债务融资成本。我们在2003年至2016年间对17个国家/地区的163,243个公司年进行了抽样调查,发现经济政策的不确定性对债务融资成本产生了积极影响,而在2008年至2009年的全球金融危机期间,这种影响更加强烈。此外,我们的研究结果还表明大公司的债务融资成本受经济政策不确定性的影响较小。

更新日期:2021-03-26
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