Can economic policy uncertainty reduce a firm's trade credit?

Kun Su, Dongmin Kong and Ji Wu

International Review of Finance, 2021, vol. 21, issue 3, 1089-1099

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 marketization and high trust regions, and survived after the endogeneity tests.

Date: 2021
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