Corporate debt Regime under Political, Economic, and climate uncertainties

B-Tier
Journal: Journal of International Money and Finance
Year: 2025
Volume: 153
Issue: C

Authors (2)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

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.

Technical Details

RePEc Handle
repec:eee:jimfin:v:153:y:2025:i:c:s0261560625000336
Journal Field
International
Author Count
2
Added to Database
2026-01-25