The influence of economic policy uncertainty on corporate trade credit and firm value

Jory, Surendranath Rakesh; Khieu, Hinh D.; Ngo, Thanh; Phan, Hieu V.

doi:10.1016/j.jcorpfin.2020.101671

Cited by 108 publications

(76 citation statements)

References 77 publications

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“…Results are also consistent with Jory et al (2019). They examined the relationship between government economic policy uncertainty (EPU) and trade credit and its impact on firm value of all public U.S firms.…”

Section: Resultssupporting

confidence: 64%

“…Investments in accounts receivable represented significant proportion for firms in both developed and developing economies yet receivables research is ignored as part of trade credit, especially in developing economies.For example, Barrot (2016) reported trade credit to bank loan ratio as three to one for all U.S non-financial firms. Jory et al (2019) took data from the year 2003 to 2018 for all U.S firms and reported mean value of 61% for receivables to total assets ratio. McGuinness et al (2018) reported accounts receivables as 30% of total assets for 202,696 SMEs across 13 European countries and receivables are 45% in our full sample of South Asian emerging economies.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Accounts Receivable and Firm Value: Evidence from South Asian Emerging Economies

Usman¹

2020

PSSR

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Section: Resultssupporting

confidence: 64%

Section: Introductionmentioning

confidence: 99%

Accounts Receivable and Firm Value: Evidence from South Asian Emerging Economies

Usman¹

2020

PSSR

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“…Hence, banks are less willing to provide loans [25,26] and firms' cost of capital becomes higher [20,27]. Moreover, the informal financing channels such as trade credits are also reduced [28,29]. Facing tighter financial constraints, it is highly possible that firms will cut down on R&D investment, as many R&D activities are not urgent and a relatively long time is needed to recover investment into R&D.…”

Section: Uncertainty May Reduce Randd Investmentmentioning

confidence: 99%

The Negative Impact of Uncertainty on R&D Investment: International Evidence

2021

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Previous studies have not provided consistent conclusions regarding the impact of uncertainty on research and development (R&D) investment. While most of the previous literature has focused only on one or a small group of countries, this study examines the effect of uncertainty on R&D on the basis of a sample covering 109 countries from 1996 to 2018. The country-level uncertainty is measured using the “World Uncertainty Index”, which has recently been developed by Ahir et al. (2018). By estimating a panel data fixed-effects regression model, it is found that uncertainty has a significantly negative impact on R&D investment at the country-level aggregate scale. We also find that uncertainty depresses the number of R&D personnel and patent applications, although the effect on R&D personnel is not statistically significant. These findings imply that high uncertainty poses a considerable threat to global innovation and technological progress. Heterogeneity analyses across different country groups demonstrate that, although the impact of uncertainty on R&D is not statistically significant in some country groups, its effect is always negative and no positive effect is observed.

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“…Maka dari itu, trade credit akan memudahkan penyaluran produk dari pihak penjual kepada pihak pembeli, dan bersifat fundamental dalam supply chain (Cheng & Pike, 2003 Terdapat 2 kemungkinan bagaimana uncertainty dapat berdampak terhadap trade credit. Pertama, Jory et al (2020) menjelaskan bahwa uncertainty yang tinggi dapat berpengaruh terhadap tingkat produksi perusahaan, dimana perusahaan akan mengurangi produksi yang akan berpengaruh terhadap ketersediaan produk. Gulen & Ion, (2016) juga menemukan bahwa uncertainty memiliki hubungan yang negatif dengan tingkat investasi perusahaan, karena uncertainty menyebabkan fluktuasi pada harga aset serta permintaan pasar, maka perusahaan akan memilih untuk menyediakan kas cadangan lebih seiring meningkatnya risiko.…”

Section: Pendahuluanunclassified

“…Uncertainty merupakan risiko yang timbul atas ketidakpastian kebijakan moneter, fiskal, ataupun regulasi pada tingkatan makro (Jory et al, 2020). Penelitian yang dilakukan oleh Gulen & Ion, (2016) menemukan bahwa periode uncertainty yang tinggi akan menyebabkan penurunan pada investasi perusahaan.…”

Section: Pengembangan Hipotesisunclassified

Pengaruh Uncertainty Terhadap Kebijakan Trade Credit Perusahaan Indonesia

Febrianto

Juliana

2021

JAB

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ABSTRACT : Uncertainty seems to be the root of prolonged recession period problem and it increases researcher concern regarding its effect to the economy. During high uncertainty period, information is not clear and affect firm’s decision maker regarding their investment, capital structure and also trade credit policy. In this paper, we aim to find the effect of uncertainty to firm’s trade credit policy. Uncertainty is argued to increase firm’s credit risk and thus, firm should adjust their trade credit policy to survive. Our sample includes non-financial listed firms in Indonesia Stock Exchange (IDX), with observation period from 2006 Q1 to 2019 Q4. The financial data used to construct the variables are obtained from the S&P Capital IQ database. The methodology used is fixed effect panel data regression. This study utilized uncertainty measurement developed by Ahir et al. (2018), that is the world uncertainty index (WUI). Using total of 12,773 firm-quarter observations, our result show that uncertainty indeed caused firms to adjust their trade credit policy. Uncertainty caused higher cost of capital, as consequences firms decide to tighten their credit policy to its customer and decrease their payables to the supplier as precautionary to avoid future financial distress. Keywords: Uncertainty, trade credit policy, receivable days, payable days ABSTRAK : Ketidakpastian dianggap menjadi akar dari masalah periode resesi yang panjang dan hal ini meningkatkan kekhawatiran dari para peneliti mengenai efeknya terhadap ekonomi. Pada keadaan ketidakpastian yang tinggi, informasi menjadi tidak jelas dan mempengaruhi pengambil keputusan didalam perusahaan mengenai kebijakan investasi, struktur modal dan juga kredit dagang. Pada penelitian ini, kami bertujuan untuk menemukan efek dari ketidakpastian pada kebijakan kredit dagang perusahaan. Ketidakpastian dikatakan dapat meningkatkan resiko kredit perusahaan dan sehingga, perusahaan perlu menyesuaikan kebijakan kredit dagang mereka untuk dapat bertahan. Sampel penelitian ini termasuk perusahaan non keuangan yang terdaftar pada bursa efek Indonesia (BEI), dengan periode observasi dari 2006 kuartal 1 hingga 2019 kuartal 4. Data keuangan yang digunakan untuk membentuk variabel pebelitian diambil dari the S&P Capital IQ database. Metodologi yang digunakan adalah regresi data panel fixed effect. Penelitian ini menggunakan ukuran ketidakpastian yang dikembangkan oleh Ahir et al.(2018), yaitu the world uncertainty index (WUI). Dengan menggunakan total observasi sebanyak 12.773 perusahaan-kuartal, hasil yang didapatkan menunjukkan bahwa ketidakpastian mennyebabkan perusahaan untuk melakukan penyesuaian pada kebijakan kredit dagangnya. Ketidakpastian meningkatkan biaya modal dan sebagai akibatnya perusahaan memutuskan untuk memperketat kebijkan kredit kepada pembeli dan menurunkan hutang dagangnya pada pemasok sebagai tindakan berhati-hati untuk menghindari kesulitan keuangan dimasa depan.Kata Kunci: Ketidakpastian, kebijakan kredit dagang, receivable days, payable days

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The influence of economic policy uncertainty on corporate trade credit and firm value

Cited by 108 publications

References 77 publications

Accounts Receivable and Firm Value: Evidence from South Asian Emerging Economies

Accounts Receivable and Firm Value: Evidence from South Asian Emerging Economies

The Negative Impact of Uncertainty on R&D Investment: International Evidence

Pengaruh Uncertainty Terhadap Kebijakan Trade Credit Perusahaan Indonesia

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