Corporate debt Regime under Political, Economic, and climate uncertainties

IF 2.8 2区经济学 Q2 BUSINESS, FINANCE

Journal of International Money and Finance Pub Date : 2025-02-12 DOI:10.1016/j.jimonfin.2025.103298

Sitara Karim , Constantin Gurdgiev

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Abstract

How do political, economic, and climate uncertainties influence corporate debt decisions across firms with different leverage exposures? This study explores the effects of these macro-level uncertainties on corporate debt strategies using a dataset of 11,305 firm-year observations based on a wide range of methodologies, including random effects GLS, differenced GMM, and system GMM. To explore informational complexity of the macro uncertainties-debt choices nexus, we examine the moderating roles of analyst coverage and market concentration on the given relationship. The findings reveal that political uncertainty significantly increases debt exposures in high-leverage firms, while climate uncertainty reduces leverage across all firms. Economic uncertainty, however, shows no significant effect on debt. The moderating effects of analyst coverage and market concentration are limited, with market concentration positively influencing debt holdings only in high-leverage firms. For policymakers and corporate managers, these insights emphasize the need to incorporate political and climate risks into financial decision-making, particularly for highly leveraged firms.

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来源期刊

Journal of International Money and Finance BUSINESS, FINANCE-

CiteScore

4.20

自引率

4.00%

发文量

141

期刊介绍： Since its launch in 1982, Journal of International Money and Finance has built up a solid reputation as a high quality scholarly journal devoted to theoretical and empirical research in the fields of international monetary economics, international finance, and the rapidly developing overlap area between the two. Researchers in these areas, and financial market professionals too, pay attention to the articles that the journal publishes. Authors published in the journal are in the forefront of scholarly research on exchange rate behaviour, foreign exchange options, international capital markets, international monetary and fiscal policy, international transmission and related questions.