Firm-level political risk and external financing choices
- Authors
- Jang, Soomi; Choi, Heeick; Kim, Hyung Tae
- Issue Date
- Dec-2023
- Publisher
- Elsevier Ltd
- Keywords
- Firm-level political risk; External financing; Precautionary savings; Market timing; Internal financial constraints
- Citation
- FINANCE RESEARCH LETTERS, v.58, pp.1 - 9
- Indexed
- SSCI
SCOPUS
- Journal Title
- FINANCE RESEARCH LETTERS
- Volume
- 58
- Start Page
- 1
- End Page
- 9
- URI
- https://scholarworks.bwise.kr/hanyang/handle/2021.sw.hanyang/192263
- DOI
- 10.1016/j.frl.2023.104337
- ISSN
- 1544-6123
- Abstract
- This study investigates the association between firm-level political risk and external financing choices. We find that firm-level political risk is positively related to net equity issuance but is insignificantly associated with net debt issuance. The evidence shows that precautionary savings, market timing, and internal financial constraints could explain the positive relation between firm-level political risk and net equity issuance. Overall, our findings suggest that firms exposed to higher political risk issue more equity than debt as a source of external financing.
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