Can Economic Policy Uncertainty Reduce a Firm’s Trade Credit?

20 Pages Posted: 7 May 2020

See all articles by Kun Su

Kun Su

Northwestern Polytechnic University (NPU)

Dongmin Kong

Department of Finance, Huazhong University of Science and Technology

Ji (George) Wu

Massey University - School of Economics and Finance

Date Written: April 13, 2020

Abstract

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

Suggested Citation

Su, Kun and Kong, Dongmin and Wu, Ji (George), Can Economic Policy Uncertainty Reduce a Firm’s Trade Credit? (April 13, 2020). Available at SSRN: https://ssrn.com/abstract=3574354 or http://dx.doi.org/10.2139/ssrn.3574354

Kun Su

Northwestern Polytechnic University (NPU) ( email )

47671 Westinghouse Drive
Fremont, CA 94539
United States

Dongmin Kong

Department of Finance, Huazhong University of Science and Technology ( email )

Wuhan, Hubei 430074
China

Ji (George) Wu (Contact Author)

Massey University - School of Economics and Finance ( email )

Private Bag 102904
North Shore
Auckland, Auckland 0745
New Zealand
+6292127089 (Phone)

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