Economic Policy Uncertainty, National Culture, and Corporate Debt Financing

Financial innovation vis-à-vis economic policy uncertainty (EPU) without due regards being given to debt financing. This paper fills this gap and unveils the dynamic role of national culture in defining financing via EPU. We use a sample 3831 non-financial firms Asian economies employ System Generalized Method Moments estimate regression coefficients. Our findings reveal an inverse relationship between EPU financing, which suggests that finance mitigation strategies are successfully executed region. The potential reasons for include policies by businesses reduce business activities avoid unfavorable rising cost through On supply side, induces banks accelerate their interest rate increased default risk. Similarly, we observe high avoidance (UND) has negative significant link with unpleasant behavior corporate managers towards when they have alternate source instruments instead accepting long-term obligations. However, find UND interaction significantly positive impact on rigid managers, forces them consider cultural traits converts risk-averse attitude into risk-friendly behavior. implies should reflect sensitivity while considering