Can Economic Policy Uncertainty Reduce a Firm’s Trade Credit?
20 Pages Posted: 7 May 2020
Date Written: April 13, 2020
We examine how economic policy uncertainty (EPU) impacts on Chinese firm’s trade credit. We find a significant negative relationship between EPU and both firm’s account payable (receiving) and account receivable (offering). These results were more pronounced for non-state-owned enterprises, firms located in high marketisation and high trust regions, and survived after the endogeneity tests.
Keywords: economic policy uncertainty; trade credit; China
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