Economic Uncertainty and Firms’ Capital Structure: Evidence from China
This article assesses the effects of economic uncertainty on the corporate capital structure of Chinese-listed firms using a panel dataset of 1138 firms with A-shares traded on the Shanghai Stock Exchange and Shenzhen Stock Exchange for the period 2006–2020 and fixed-effect regression analysis. Econ...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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MDPI AG
2023-03-01
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| Series: | Risks |
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| Online Access: | https://www.mdpi.com/2227-9091/11/4/66 |
| _version_ | 1797603562629365760 |
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| author | Chenglin Gao Takuji W. Tsusaka |
| author_facet | Chenglin Gao Takuji W. Tsusaka |
| author_sort | Chenglin Gao |
| collection | DOAJ |
| description | This article assesses the effects of economic uncertainty on the corporate capital structure of Chinese-listed firms using a panel dataset of 1138 firms with A-shares traded on the Shanghai Stock Exchange and Shenzhen Stock Exchange for the period 2006–2020 and fixed-effect regression analysis. Economic uncertainty had a negative influence on Chinese firms’ debt ratios, especially for non-state-owned enterprises. Furthermore, firms’ leverage decreased on average during the 2008 Great Recession, whereas it increased during the 2018–2019 US–China Trade War and the 2020 COVID-19 pandemic. The findings provide quantitative evidence of the effects of economic uncertainty on the capital structure of firms in a transition economy. |
| first_indexed | 2024-03-11T04:33:48Z |
| format | Article |
| id | doaj.art-3349e980292d4805b3aa0b2277e43b3f |
| institution | Directory Open Access Journal |
| issn | 2227-9091 |
| language | English |
| last_indexed | 2024-03-11T04:33:48Z |
| publishDate | 2023-03-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Risks |
| spelling | doaj.art-3349e980292d4805b3aa0b2277e43b3f2023-11-17T21:13:52ZengMDPI AGRisks2227-90912023-03-011146610.3390/risks11040066Economic Uncertainty and Firms’ Capital Structure: Evidence from ChinaChenglin Gao0Takuji W. Tsusaka1School of Management, Asian Institute of Technology, Khlong Luang, Pathum Thani 12120, ThailandSchool of Environment, Resources and Development, Asian Institute of Technology, Khlong Luang, Pathum Thani 12120, ThailandThis article assesses the effects of economic uncertainty on the corporate capital structure of Chinese-listed firms using a panel dataset of 1138 firms with A-shares traded on the Shanghai Stock Exchange and Shenzhen Stock Exchange for the period 2006–2020 and fixed-effect regression analysis. Economic uncertainty had a negative influence on Chinese firms’ debt ratios, especially for non-state-owned enterprises. Furthermore, firms’ leverage decreased on average during the 2008 Great Recession, whereas it increased during the 2018–2019 US–China Trade War and the 2020 COVID-19 pandemic. The findings provide quantitative evidence of the effects of economic uncertainty on the capital structure of firms in a transition economy.https://www.mdpi.com/2227-9091/11/4/66capital structuredebt leveleconomic uncertaintypanel regressionstate-owned enterprise |
| spellingShingle | Chenglin Gao Takuji W. Tsusaka Economic Uncertainty and Firms’ Capital Structure: Evidence from China Risks capital structure debt level economic uncertainty panel regression state-owned enterprise |
| title | Economic Uncertainty and Firms’ Capital Structure: Evidence from China |
| title_full | Economic Uncertainty and Firms’ Capital Structure: Evidence from China |
| title_fullStr | Economic Uncertainty and Firms’ Capital Structure: Evidence from China |
| title_full_unstemmed | Economic Uncertainty and Firms’ Capital Structure: Evidence from China |
| title_short | Economic Uncertainty and Firms’ Capital Structure: Evidence from China |
| title_sort | economic uncertainty and firms capital structure evidence from china |
| topic | capital structure debt level economic uncertainty panel regression state-owned enterprise |
| url | https://www.mdpi.com/2227-9091/11/4/66 |
| work_keys_str_mv | AT chenglingao economicuncertaintyandfirmscapitalstructureevidencefromchina AT takujiwtsusaka economicuncertaintyandfirmscapitalstructureevidencefromchina |