Analysis of changes in corporate external guarantee behavior and the role of governance factors under economic policy uncertainty

Xiaodong Huang, Jiayi Zhao, Boqiang Hu and Chenzhi Zhu

International Review of Financial Analysis, 2025, vol. 97, issue C

Abstract: This study utilizes quarterly data from China's A-share listed companies spanning the years 2010 to 2022 to investigate how economic policy uncertainty influences corporate external guarantee practices. The findings reveal that as economic policy uncertainty escalates, corporations tend to broaden the scope of their external guarantees. The underlying mechanism suggests that, firstly, banks respond to heightened economic policy uncertainty by elevating credit financing thresholds and restricting credit supply. Secondly, corporations, impacted by the broader macroeconomic environment, experience a decline in profitability and liquidity, prompting them to increase external guarantee activities as a means of securing external financing. Notably, for corporations with more proficient boards and stronger operational capabilities, the influence of economic policy uncertainty on their external guarantee practices is comparatively diminished.

Keywords: Economic policy uncertainty; External guarantee behavior; Governance level (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1057521924007336
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:97:y:2025:i:c:s1057521924007336

DOI: 10.1016/j.irfa.2024.103801

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu ().