Does economic policy uncertainty shorten the loan term structure? Evidence from China

Qianlong Ma (), Bokun Hei () and Guangchen Li ()
Additional contact information
Qianlong Ma: Beijing Wuzi University
Bokun Hei: Beijing Wuzi University
Guangchen Li: Beijing Wuzi University

Economic Change and Restructuring, 2024, vol. 57, issue 4, No 18, 25 pages

Abstract: Abstract Using Chinese listed companies from 2011 to 2021, we employ textual analysis to examine the influence of the subjective perception of economic policy uncertainty (SPEPU) on the loan term structure of enterprises. The results show that SPEPU shortens the loan term structure of enterprises. After robustness tests, our results are still valid. Mechanism analysis shows that SPEPU works through increasing corporate financing costs and reducing corporate ESG performance. Moreover, reducing financing constraints and improving financial environment will alleviate this phenomenon. Additionally, in state-owned enterprises, enterprises with large performance fluctuations and good internal control, this phenomenon is more pronounced. Further analysis reveals a trend of short-term borrowing for long-term use, where short-term bank loans are used to offset the shortage of long-term bond financing and fixed asset investments. The conclusions have important significance for enterprises to mitigate liquidity risk and operate smoothly during economic fluctuations.

Keywords: Subjective perception of economic policy uncertainty; Loan term structure; Liquidity risks; Textual analysis (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10644-024-09738-2 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:kap:ecopln:v:57:y:2024:i:4:d:10.1007_s10644-024-09738-2

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/10644/PS2

DOI: 10.1007/s10644-024-09738-2

Access Statistics for this article

Economic Change and Restructuring is currently edited by George Hondroyiannis

More articles in Economic Change and Restructuring from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().