scholarly journals Economic Policy Uncertainty, National Culture, and Corporate Debt Financing

2021 ◽  
Vol 13 (20) ◽  
pp. 11179
Author(s):  
Bilal Haider Subhani ◽  
Umar Farooq ◽  
M. Ishaq Bhatti ◽  
Muhammad Asif Khan
Keyword(s):  
Economic Policy ◽  
National Culture ◽  
Default Risk ◽  
Positive Impact ◽  
Generalized Method Of Moments ◽  
Debt Financing ◽  
Mitigation Strategies ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
Corporate Managers

Financial innovation vis-à-vis economic policy uncertainty (EPU) without due regards being given to debt financing. This paper fills this gap and unveils the dynamic role of national culture in defining debt financing via EPU. We use a sample of 3831 non-financial firms of Asian economies and employ the System Generalized Method of Moments to estimate the regression coefficients. Our findings reveal an inverse relationship between the EPU and debt financing, which suggests that debt finance mitigation strategies are successfully executed in the region. The potential reasons for this include the policies by businesses to reduce business activities and avoid the unfavorable rising financing cost through EPU. On the supply side, the rising EPU induces the banks to accelerate their interest rate due to increased default risk. Similarly, we observe that high uncertainty avoidance (UND) has a negative and significant link with debt financing due to an unpleasant behavior of corporate managers towards debt when they have an alternate source of financing instruments instead of accepting long-term obligations. However, we find that the UND and EPU interaction has a significantly positive impact on debt financing due to the rigid behavior of managers, which forces them to consider cultural traits and converts their risk-averse attitude into risk-friendly behavior. This implies that corporate managers should reflect the sensitivity of the national culture while considering debt financing.

scholarly journals The Sensitivity of Firms’ Investment to Uncertainty and Cash Flow: Evidence From Listed State-Owned Enterprises and Non-State-Owned Enterprises in China

SAGE Open ◽  
2020 ◽  
Vol 10 (1) ◽  
pp. 215824402090343 ◽  
Author(s):  
Muhammad Arif Khan ◽  
Xuezhi Qin ◽  
Khalil Jebran ◽  
Abdul Rashid
Keyword(s):  
Economic Policy ◽  
Cash Flow ◽  
Generalized Method Of Moments ◽  
Corporate Investment ◽  
Policy Uncertainty ◽  
Market Uncertainty ◽  
Negative Effects ◽  
Economic Policy Uncertainty ◽  
Listed Firms ◽  
Positive Effects

This study examines the association between various uncertainties and corporate investment and further investigates this association between state-owned enterprises (SOEs) and non-state-owned enterprises (non-SOEs). Moreover, this study analyzes the indirect effects of uncertainty on corporate investment through cash flow. The current research uses an unbalanced panel data of Chinese nonfinancial listed firms for the period 1999–2016. To control endogeneity issues, this study applies a robust two-step system generalized method of moments (GMM) technique to estimate the model. Empirical findings indicate that market-based and firm-specific uncertainties have positive effects, whereas economic policy and CAPM-based uncertainties have negative effects on corporate investment. Furthermore, results indicate that the effects of market-based, CAPM-based, and firm-specific uncertainties (economic policy uncertainty) were less (more) prominent for SOEs. Additional analyses show that cash flow stimulates the effect of firm-specific uncertainty on SOEs’ investment, whereas it weakens the influence of CAPM-based uncertainty (economic policy uncertainty) on investment of non-SOEs (SOEs). Moreover, cash flow attenuates the market uncertainty effect on investment.

scholarly journals Economic Policy Uncertainty, Heterogeneity of Executives and Enterprise Innovation

2021 ◽  
Vol 4 (3) ◽  
Author(s):  
Xun Han ◽  
Yuyan Jiang ◽  
Xianjing Huang
Keyword(s):  
Economic Policy ◽  
Positive Impact ◽  
Policy Uncertainty ◽  
Senior Executives ◽  
Moderating Effects ◽  
Economic Policy Uncertainty ◽  
Dynamic Investment ◽  
Investment And Financing ◽  
Political Background ◽  
Enterprise Innovation

This study analyzes how economic policy uncertainty affects corporate innovation, and the moderating effects of executive heterogeneity. A threephase dynamic investment and financing model is first built to analyze the mechanism. Empirical analysis confirms that the increase in the degree of economic policy uncertainty promotes enterprise innovation. Further results show that this promotion effect is more significant in enterprises with male executives, low educational level, no financial experience and political background. Moreover, the positive impact is only found in enterprises with moderate executive ability, and the overconfidence of senior executives plays a positive regulating role in it.

scholarly journals COVID-19, Oil Price, Bitcoin, and US Economic Policy Uncertainty: Evidence from ARDL Model

2021 ◽  
Vol 13 (11) ◽  
pp. 88
Author(s):  
Hanan Naser
Keyword(s):  
Economic Policy ◽  
Financial Market ◽  
Global Economy ◽  
Positive Impact ◽  
Oil Price ◽  
Market Volatility ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
The Impact

The pandemic of coronavirus (COVID-19) creates fear and uncertainty causing extraordinary disruption to financial markets and global economy. Witnessing the fastest selloff in the American stock market in history with a plunge of more than 28% in S&P 500 has increased the volatility of global financial market to exceed the level observed during the financial crisis of 2008. On the other hand, Bitcoin value has shown considerable stability in the last couple of months peaking at $10,367.53 in the mid of February 2020. In this context, the aim of this paper is to investigate the impact of COVID-19 numbers on Bitcoin price taking into consideration number of controlling variables including WTI-oil price, S&P 500 index, financial market volatility, gold prices, and economic policy uncertainty of the US. To do so, ARDL estimation has been applied using daily data from December 31, 2019 till May 20, 2020. Key findings reveal that the daily reported cases of new infections have a marginal positive impact on Bitcoin price in the long term. However, the indirect impact associated with the fear of COVID-19 pandemic via financial market stress cannot be neglected. Bitcoin can also serve as a hedging tool against the economic policy uncertainty in the long term. In the short run, while the returns of economic policy uncertainty have no impact on Bitcoin price, the growth in the new cases of COVID-19 infection and returns of financial market volatility have more positive significant impact on Bitcoin returns.

Understanding the effects of economic policy uncertainty on US tourism firms’ performance

2021 ◽  
pp. 135481662098314
Author(s):  
Conrado Diego García-Gómez ◽  
Ender Demir ◽  
Ming-Hsiang Chen ◽  
José María Díez-Esteban
Keyword(s):  
Economic Policy ◽  
Firm Performance ◽  
Negative Impact ◽  
Generalized Method Of Moments ◽  
High Growth ◽  
Policy Uncertainty ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Economic Policy Uncertainty ◽  
The Impact

This study analyzes the impact of economic policy uncertainty (EPU) on the performance of US tourism firms using a sample of 296 publicly traded tourism companies from 2000 to 2018 with a sample of 3068 firm-year observations. Estimation results of panel regressio tests based on the system-generalized method of moments indicate that EPU has a negative impact on return on assets (ROA), return on equity (ROE), and Tobin’s Q. Our results are consistent for different variable specifications. We also find that firm size and leverage play a moderating role in the relationship between EPU and firm performance. Panel quantile regression results show that the impact of EPU on US tourism firm performance is asymmetric. Specifically, low-performing (25% quantile of ROA and ROE) firms are less affected by EPU, and for the case of Tobin’s Q, EPU does not affect firms with a high growth opportunity (100% quantile of Tobin’s Q).

scholarly journals Impact of Trump’s Phenomenon, Brexit, & Oil Prices Fluctuation Toward Indonesia’s Economic Growth

2018 ◽  
Vol 7 (4) ◽  
pp. 348-373
Author(s):  
Abdul Holik
Keyword(s):  
Economic Growth ◽  
Economic Policy ◽  
Negative Impact ◽  
Positive Impact ◽  
Oil Prices ◽  
Developed Countries ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
The Us ◽  
Short Run

This paper tries to find impact of global uncertainties toward Indonesia’s economic growth. Several problems which will be discussed in this paper namely: impacts of President Donald Trump’s policies, Brexit, and uncertainty regarding crude oil prices. It conducted from 1st quarter of 2010 until 1st quarter of 2017. The method of analysis used here is VECM (Vector Error Correction Model). We use dummy variable to capture the specific change of economic policies when Brexit and Trump’s emergence appear as the major issues which attract attention around the world. We consider these as the uncertainties which influence global society. Based on the result, there is positive impact of economic policy uncertainty in UK in the long-run. When Brexit was taken into account, in the short-run, it also has positive impact toward Indonesia’s economic growth. Meanwhile economic policy uncertainty in the US generates negative impact on Indonesia’s economic growth. But Trump’s emergence in the US presidency produces positive impact in the short-run. Oil price fluctuation as the latest shock in the global context has positive significant impact on Indonesia’s economic growth. We consider these results as ways to find breakthrough in understanding of changing policies from developed countries; that not all of them will contribute to negative matters. The conjecture, hunch, and any speculation must be postponed due to lack of convincing proofs.

scholarly journals Asymmetric Risk Spillover Networks and Risk Contagion Driver in Chinese Financial Markets: The Perspective of Economic Policy Uncertainty

Complexity ◽  
2021 ◽  
Vol 2021 ◽  
pp. 1-10
Author(s):  
Zongxin Zhang ◽  
Ying Chen ◽  
Weijie Hou
Keyword(s):  
Economic Policy ◽  
Real Estate ◽  
Financial Markets ◽  
Financial Risk ◽  
Positive Impact ◽  
Spillover Effect ◽  
Spillover Effects ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
The Impact

The global financial market shocks have intensified due to the COVID-19 epidemic and other impacts, and the impacts of economic policy uncertainty on the financial system cannot be ignored. In this paper, we construct asymmetric risk spillover networks of Chinese financial markets based on five sectors: bank, securities, insurance, diversified finance, and real estate. We investigate the complexity of the risk spillover effect of Chinese financial markets and the impact of economic policy uncertainty on the level of network contagion of financial risk. The study yields three findings. First, the cross-sectoral risk spillover effects of Chinese financial markets are asymmetric in intensity. The bank sector is systemically important in the risk spillover network. Second, the level of risk stress in the real estate sector has increased in recent years, and it plays an important role in the path of financial risk contagion. Third, Economic policy uncertainty has a significant positive impact on the level of network contagion of financial risk of Chinese financial markets.

scholarly journals Economic Policy Uncertainty in China and Bitcoin Returns: Evidence From the COVID-19 Period

2021 ◽  
Vol 9 ◽  
Author(s):  
Tiejun Chen ◽  
Chi Keung Marco Lau ◽  
Sadaf Cheema ◽  
Chun Kwong Koo
Keyword(s):  
Economic Policy ◽  
Quantile Regression ◽  
Least Squares ◽  
Positive Impact ◽  
Ordinary Least Squares ◽  
Policy Uncertainty ◽  
Jel Codes ◽  
Economic Policy Uncertainty ◽  
Estimation Techniques ◽  
Daily Returns

This paper analyses the effects of the Chinese Economic Policy Uncertainty (CEPU) index on the daily returns of Bitcoin for the period from December 31, 2019 to May 20, 2020. Utilizing the Ordinary Least Squares (OLS) and the Generalized Quantile Regression (GQR) estimation techniques, the paper illustrates that the current CEPU has a positive impact on the returns of Bitcoin. However, the positive impact is statistically significant only at the higher quantiles of the current CEPU. It is concluded that Bitcoin can be used in hedging against policy uncertainties in China since significant rises in uncertainty leads to a higher return in Bitcoin.JEL Codes: G32; G15; C22

Economic policy uncertainty, consumer confidence in major economies and outbound tourism to African countries

2021 ◽  
pp. 135481662098538
Author(s):  
Hassan F Gholipour ◽  
Robin Nunkoo ◽  
Behzad Foroughi ◽  
Hassan Kalantari Daronkola
Keyword(s):  
Economic Policy ◽  
Generalized Method Of Moments ◽  
Positive Change ◽  
Consumer Confidence ◽  
Policy Uncertainty ◽  
African Countries ◽  
Economic Policy Uncertainty ◽  
Negative Effect ◽  
The Impact ◽  
Tourism Flows

Uncertainty, which is the only certain thing about the future, influences economic agents, their behaviours and economic activity. Debates and concerns about policy uncertainty have intensified following events such as the financial crisis, Brexit and more recently, the Covid-19 pandemic. The purpose of this study is to investigate the impact of changes in economic policy uncertainty and consumer confidence in a set of major economies on tourism flows to African countries. Using data over the period of 2005–2019 and applying panel difference generalized method of moments method, our results show that a positive change in consumer confidence in Canada, China, France, Japan, Russia and the United Kingdom (UK) has favorable impact on tourism departures from these countries to 25 African countries. We also find that a positive change in uncertainty in Canada, Russia, Spain and the UK has negative effect on tourist departures from these countries to African countries. The implications of the results for tourism development in African countries are discussed.

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