The impact of macroeconomic uncertainty on firms' changes in financial leverage

Christopher Baum, Atreya Chakraborty () and Boyan Liu
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Boyan Liu: Beihang University, Beijing, China, Postal: Beihang University, Beijing, China

International Journal of Finance & Economics, 2010, vol. 15, issue 1, 22-30

Abstract: We investigate the relationship between a firm's measures of corporate governance, macroeconomic uncertainty and changes in leverage. Recent research highlights the role of governance in financing decisions. Previous research also indicates that macroeconomic uncertainty affects a firm's ability to borrow. In this paper we investigate how both these channels of influence affects firms' financing decisions. Our findings show that macroeconomic uncertainty has an important role to play, both by itself and in interaction with a measure of corporate governance. Copyright © 2009 John Wiley & Sons, Ltd.

Date: 2010
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Working Paper: The Impact of Macroeconomic Uncertainty on Firms' Changes in Financial Leverage (2008)
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DOI: 10.1002/ijfe.406

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