Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 15, 2018 erstellt
Beschreibung:
This study investigates the effects of economic policy uncertainty on capital structure decisions for US firms. We use all the five EPU indexes available, conduct both static and dynamic panel regression analyses, control for firm characteristics, take into account global financial episodes, and perform various coefficient restriction tests. We document strong evidence that rising economic policy uncertainty makes firms more conservative in their debt-financing decisions. This negative relationship between economic policy uncertainty and firms' capital structure choices is much stronger, if one allows the former to determine the optimal, rather than actual, level of the latter, and allows a partial rather than a full adjustment of the actual level towards the optimal level of debt ratios. The strong EPU effects so detected even make unimportant the effects of firm characteristics on capital structure decisions, challenging the long-standing conventional wisdom