Government economic policy uncertainty and corporate debt contracting

Dung Thi Thuy Tran · Hieu V. Phan

68 citations0/0 files storedInternational Review of Finance

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Corporate Finance and Governance Fiscal Policies and Political Economy Market Dynamics and Volatility

Abstract

Abstract We examine the relation between government economic policy uncertainty and debt contracting of U.S. public firms. We find that policy uncertainty is associated with more stringent debt terms, such as shorter debt maturity, higher cost of debt, and more restrictive debt covenants, and these relations are concentrated in financially constrained firms. Further analysis indicates that the negative real effects of policy uncertainty documented in the literature are more pronounced for financially constrained firms. Overall, our evidence suggests that policy uncertainty dampens external financing and exacerbates firms' financial constraints, leading to their investment delays.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 68 citations exist upstream.

References

1976Theory of the firm: Managerial behavior, agency costs and ownership structure 1986Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers 2016Measuring Economic Policy Uncertainty*1974ON THE PRICING OF CORPORATE DEBT: THE RISK STRUCTURE OF INTEREST RATES*2003Corporate Governance and Equity Prices 2001The theory and practice of corporate finance: evidence from the field 2009The Impact of Uncertainty Shocks 2010New Evidence on Measuring Financial Constraints: Moving Beyond the KZ Index

Cited by

2023ESG and debt structure: Is the nature of this relationship nonlinear?2022Economic policy uncertainty and shadow banking: Firm-level evidence from China 2022Determinants and consequences of debt maturity structure: A systematic review of the international literature 2023Economic Policy Uncertainty and Firm Value: Impact of Investment Sentiments in Energy and Petroleum 2023Does foreign competition affect corporate debt maturity structure? Evidence from import penetration

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.