Boya Century Publishing

Academic
Efficient
Fast
Set Homepage | Favorite
Article Details

FEMS052.pdf

Article Title : Meta-analysis: The Effect of Economic Policy Uncertainty on Corporate Financial Decisions and its Macroeconomic Implications
Author(s) : Jia Li
Corresponding Author : Jia Li
Keywords : Economic Policy Uncertainty; Financial Decisions; Macroeconomics; Debt Maturity Structure; Leverage.
PDF : http://download.BCPub.org/proceedings/2021/FEMS2021/FEMS052.pdf
Abstract

Over the past two decades, countries worldwide have experienced strong surges in economic policy uncertainty (EPU). EPU is an essential factor that influences and guides the financing behavior of firms. This essay's Meta-analysis demonstrates that high EPU is usually associated with a lower leverage ratio, shorter debt maturity, and increasing cash holdings. However, for firms with higher growth prospects, more access to open debt markets, and less financial constraint, EPU has less of an effect on their financial decisions. They would generally increase leverage to combat the costs during periods of under-investment. Given the influence of EPU on corporate financial decisions and its macroeconomic impacts, this essay provides a meaningful reference for policymakers regarding the importance of reducing policy uncertainty and maintaining business market confidence for smooth economic growth.

Contact email:contact@bcpub.org
Journals
Proceedings