Policy initiatives and firms' access to external finance: Evidence from a panel of emerging Asian economies

Udichibarna Bose, Ronald MacDonald, Serafeim Tsoukas
2016 Journal of Corporate Finance  
Available online xxxx JEL: C23 E44 G15 G32 O16 A B S T R A C T This paper analyses the impact of policy initiatives co-ordinated by Asian national governments on firms' composition of external finance. Using a unique firm-level database of eight Asian countries-Hong Kong SAR, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand over the period of 1996-2012 and a difference-in-differences approach, the results show a significant response of the debt composition to the policy
more » ... ion to the policy change. We find that firms increased their uptake of long-term debt, while decreased their short-term debt. We also document that less risky and more profitable firms are more significantly affected by the policy change than riskier and less profitable firms. Finally, we show that the improved access to external finance after the policy initiative helped firms to raise their investment spending.
doi:10.1016/j.jcorpfin.2016.09.008 fatcat:bmtfely7g5dnbhvmx6t26iotsq