Abstract:In the context of the current unstable macroeconomic environment, we explored the impact of economic policy uncertainty on the corporate leverage ratio. The study found that economic policy uncertainty significantly reduces firm leverage ratios. This relationship holds significantly after a series of robustness tests, supporting the point of risk aversion among corporate executives. Meanwhile, we found that firms are more inclined to reduce their short-term debt levels since short-term debts induce a greater l… Show more
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