The Impact of Economic Policy Uncertainty on Business Transaction Credit Supply
DOI:
https://doi.org/10.37134/ibej.Vol16.2.10.2023Keywords:
Business Transaction Credit Supply, Economic Policy Uncertainty, Fixed Effect OLSAbstract
Based on the China Economic Policy Uncertainty (EPU) Index, this study uses quarterly data of listed companies from 2003 to 2022 to examine how economic policy uncertainty affects corporate commercial credit supply decisions. This report mainly uses simple OLS regression method and fixed effects OLS to study the impact of EPU on commercial credit supply. The results indicate that an increase in EPU will significantly reduce the commercial transaction credit provided by companies. After eliminating the impact of time and industry, EPU has a more significant impact on the credit supply of commercial transactions. Thus, for policy makers, it is necessary to maintain the stability of economic policies as much as possible and, if necessary, supplement corresponding supporting measures to alleviate the adverse effects of EPU.
Downloads
References
Altunok, F., Mitchell, K., & Pearce, D. K. (2020). The trade credit channel and monetary policy transmission: Empirical evidence from US panel data. The Quarterly Review of Economics and Finance, 78, 226-250.
Avsar, V., & Hudgins, D. (2022). Measuring the effects of economic policy uncertainty on trade credit financing. Applied Economics Letters, 29(3), 249-252.
Baker, S. R., Bloom, N., & Davis, S. J. (2016). Measuring economic policy uncertainty. The Quarterly Journal of Economics, 131(4), 1593-1636.
Cunat, V. (2007). Trade credit: suppliers as debt collectors and insurance providers. The Review of Financial Studies, 20(2), 491-527.
Fabbri, D., & Klapper, L. F. (2016). Bargaining power and trade credit. Journal of corporate finance, 41, 66-80.
Giannetti, M., Burkart, M., & Ellingsen, T. (2011). What you sell is what you lend? Explaining trade credit contracts. The Review of Financial Studies, 24(4), 1261-1298.
Jory, S.R., Khieu, H.D., Ngo, T.N. and Phan, H.V., 2020. The influence of economic policy uncertainty on corporate trade credit and firm value. Journal of Corporate Finance, 64, p.101671.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Zhang Jiangxia
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
