Economic policy uncertainty and short-term financing: The case of trade credit

2020 ◽  
Vol 64 ◽  
pp. 101686 ◽  
Author(s):  
Ranjan D'Mello ◽  
Francesca Toscano
Keyword(s):  
Economic Policy ◽  
Trade Credit ◽  
Policy Uncertainty ◽  
Short Term ◽  
Economic Policy Uncertainty

Connectedness Among Economic Policy Uncertainties: Evidence from the Time and Frequency Domain Perspectives

2020 ◽  
Vol 8 (5) ◽  
pp. 401-433
Author(s):  
Jinxin Cui ◽  
Huiwen Zou
Keyword(s):  
Economic Policy ◽  
Financial Crisis ◽  
Spillover Effects ◽  
The United States ◽  
Practical Significance ◽  
Policy Uncertainty ◽  
The Novel ◽  
Short Term ◽  
Economic Policy Uncertainty ◽  
Crisis Period

AbstractThis paper investigates the frequency connectedness among economic policy uncertainties of G20 countries using the novel frequency connectedness proposed by Barunik and Krehlik (2018) which can depict the dynamic connectedness not only over time but also across different frequencies. The empirical results obtained in this paper demonstrate that, firstly, the connectedness among economic policy uncertainties is significant, and the spillover effects during the financial crisis and the post-financial crisis period are stronger than the pre-financial crisis period. Secondly, the United States, France, and Australia are the main net-transmitters of the economic policy uncertainty spillovers while Brazil, Italy, Mexico, and Russia act as the main net-recipients of the spillovers. Thirdly, the major international events may significantly enhance the spillover transmissions of economic policy uncertainty among different countries, thus increasing the magnitude of the total connectedness. Finally, the economic policy uncertainty spillovers are mainly transmitted in the short term, i.e., 1∼4 months instead of longer time horizons in terms of the magnitude of the frequency connectedness measures. The findings of this paper not only have profound theoretical and practical significance but also provide several significant implications for the policymakers, supervision agents, international traders, and various investors.

scholarly journals Impact of Economic Policy Uncertainty on Trade Credit Provision: The Role of Social Trust

2020 ◽  
Vol 12 (4) ◽  
pp. 1601 ◽  
Author(s):  
Peng Liu ◽  
Daxin Dong
Keyword(s):  
Economic Policy ◽  
Fixed Effects ◽  
Trade Credit ◽  
Social Trust ◽  
Alternative Measure ◽  
Policy Uncertainty ◽  
Firm Level ◽  
Economic Policy Uncertainty ◽  
The Impact

This paper explores the impact of economic policy uncertainty (EPU) on trade credit while taking into account the interactive role of social trust. The analysis is based on the panel data econometric model with fixed effects. Using firm-level data across 16 economies from 1995Q1 to 2015Q1, we find that (i) there exists a negative and highly significant relationship between economic policy uncertainty and the provision of trade credit; (ii) this relation is weaker for firms in countries with higher levels of social trust; and (iii) the effects of EPU and social trust are both more substantial for firms in more financially constrained industries. The impact of social trust is not a result of people’s high confidence in government, an effective legal system of enforcing contracts, a high-quality institutional system or an excellent system of protecting shareholders. Our result is robust if we exclude business cycle effects or use an alternative measure of financial constraints.

scholarly journals The Impact of Economic Policy Uncertainty on Capital Structure: Evidence from Russia

2019 ◽  
Vol 13 (4) ◽  
pp. 7-19
Author(s):  
Brigitte Granville ◽  
Roman Matousek ◽  
Egor Sokolov
Keyword(s):  
Economic Policy ◽  
Capital Structure ◽  
Sample Size ◽  
Policy Uncertainty ◽  
Economic Uncertainty ◽  
Short Term ◽  
Economic Policy Uncertainty ◽  
Tax Shield ◽  
Effect Model ◽  
The Status

This paper is a study of the influence of economic policy uncertainty on the capital structure of companies operating in the Russian market. The sample size is particularly notable (over 16,000 companies and 230,000 observations are included) insofar as previous studies have invariably used smaller selections due to the complexities of data processing. Several hypotheses are proposed and treated which concern the interrelations between company debt policies and the status of individual, sectoral, or industry relevant commercial activity, where the constant threat of economic uncertainty due to political or other external machinations affects the market. This research paper examines the following capital structure determinants: profitability, asset structure, company size, tax shield, non-debt tax shield, growth opportunity, and risk. The following methods are applied to test a series of nine hypotheses proposed as the most salient indicators of the present state of academic consensus: the Pool model (Pool), the fixed effect model (FE), and the random effect model (RE). In this context, the influence of economic uncertainty on the status of different debt types in 16,882 Russian companies between 2000 and 2017 was studied using the economic policy uncertainty index calculated in 2012. The results serve to confirm many of the extant hypotheses in the academic literature in the area of capital structural evaluation. For example, it is immediately apparent that the influence of uncertainty is of less significance for large companies as regards all types of debt (joint, short-term and long-term), due to their greater stability and lower risks for creditors. Among other conclusions, it is confirmed that as long as serious government participation is characteristic of the Russian banking system, the efficacy of the debt financing system is not equal for all sectors, and those sectors which are of strategic importance for the state are particularly resilient in troubled economic periods. However, interestingly, in the case of a short-term debt leverage such influence does not materialise. From a theoretical point of view this paper will be useful for researchers studying the fluctuating market conditions of developing or transitional markets (the large sample size will make this study particularly attractive for further evaluation at all levels of academic analysis). An understanding of the multivariate interrelations described in this paper may also be useful to company managers and investors who will gain insight into the consequences of fluctuations in levels of economic uncertainty for different types of companies.

scholarly journals Research on the Effectiveness of China’s Macro Control Policy on Output and Technological Progress under Economic Policy Uncertainty

2021 ◽  
Vol 13 (12) ◽  
pp. 6844
Author(s):  
Ganwen Zheng ◽  
Songping Zhu
Keyword(s):  
Economic Policy ◽  
Technological Progress ◽  
Control Policy ◽  
Output Growth ◽  
Policy Uncertainty ◽  
Short Term ◽  
Economic Policy Uncertainty ◽  
Macroeconomic Regulation And Control ◽  
And Control

The uncertainty of economic policy, a specific form of uncertainty, can affect both economic growth, and the effectiveness of the macroeconomic regulation and control policy. Existing studies have analyzed the impacts of economic policy uncertainty on investment, consumption, trade, and total factor survival, but there is no analysis of the effectiveness of macroeconomic regulation and control policies on output and technological progress in a deterministic environment. Output growth and technological progress show the performance of economic growth in gross and efficiency, respectively, which is the external performance and internal driving force of economic growth. To achieve long-term sustainable economic development, it is necessary to consider both the aggregate problem and technological progress. In this context, this paper attempts to explore the effectiveness of China’s macroeconomic regulation and control policy on output growth and technological progress under the economic policy uncertainty. Specifically, this paper first analyzes the effectiveness of macroeconomic regulation and control policy on China’s output growth and technological progress in an uncertain environment, and then makes an empirical study by constructing a time-varying parameter vector autoregression model (TVP-VAR). Furthermore, the simulation test of the relevant results is carried out using the counter-fact analysis method. The empirical results show that: (1) under the uncertainty environment, the direction of the effect of price monetary policy on output has not changed, the effect of interest rate increase on output growth is negative, and the impact is stronger in the short term than in the medium and long term; the effect of rising interest rates on technological progress is positive, and the effect intensity is also significant in the short term, but weak in the medium and long term, the effect of price monetary policy on output is stronger under moderate uncertainty. (2) Credit growth can promote output growth, and the regulation effect of credit growth on output growth is mainly reflected in the short term under the TVP-VAR model, the effect of credit growth on technological progress is not significant. Further research using counterfactual analysis shows that the uncertain environment will reduce the effect of credit policy on output growth, but the effect is not significant.

scholarly journals PENGARUH KETIDAKPASTIAN KEBIJAKAN EKONOMI AMERIKA SERIKAT, TIONGKOK, DAN JEPANG TERHADAP JAKARTA ISLAMIC INDEX

2021 ◽  
Vol 11 (1) ◽  
pp. 95
Author(s):  
Maulidia Royhana ◽  
Titi Dewi Warninda
Keyword(s):  
Economic Policy ◽  
Time Series Data ◽  
Series Data ◽  
Policy Uncertainty ◽  
Long Term Effects ◽  
Short Term ◽  
Economic Policy Uncertainty ◽  
United State ◽  
Long Term Effect

This research aims to analyze the influence of United State Economic Policy Uncertainty, Tiongkok Economic Policy Uncertainty, and Japan Economic Policy Uncertainty on the Jakarta Islamic Index. This study used time-series data from January 2001 to December 2019 and Error Correction Model (ECM) to analyze the short-term and long-term effects of United State, Tiongkok and Japan Economic Policy Uncertainty on the Jakarta Islamic Index. The results of this research show that United State EPU and Tiongkok EPU have no short-term and long-term effect on Jakarta Islamic Index. Meanwhile, in the short-term, Japan EPU has a significant influence on the Jakarta Islamic Index but has no long-term influence.

Sign in / Sign up

Export Citation Format

Share Document