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- Title
Economic Uncertainty and Firms' Capital Structure: Evidence from China.
- Authors
Gao, Chenglin; Tsusaka, Takuji W.
- Abstract
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.
- Subjects
CHINA; ECONOMIC uncertainty; CAPITAL structure; SHANGHAI Stock Exchange; SHENZHEN zheng quan jiao yi suo; COVID-19 pandemic; BUSINESS enterprises; GREAT Recession, 2008-2013; TRANSITION economies; INTERNATIONAL trade disputes; RENMINBI
- Publication
Risks, 2023, Vol 11, Issue 4, p66
- ISSN
2227-9091
- Publication type
Article
- DOI
10.3390/risks11040066