Macroeconomic uncertainty and corporate capital structure: evidence from the Asia Pacific Region

The purpose of this paper is to examine the impact of macroeconomic uncertainty on corporate capital structure. This paper considers a wide spectrum of proxies for macroeconomic uncertainty to identify which types of macroeconomic uncertainty are important to the capital structure decisions of a sam...

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Main Authors:	Chow, Yee Peng, Junaina Muhammad, A.N. Bany-Ariffin, Cheng, Fan Fah
Format:	Article
Language:	English
Published:	Penerbit Universiti Kebangsaan Malaysia 2019
Online Access:	http://journalarticle.ukm.my/14122/ http://journalarticle.ukm.my/14122/ http://journalarticle.ukm.my/14122/1/jeko_53%282%29-8.pdf

id	ukm-14122
recordtype	eprints
spelling	ukm-141222020-02-06T13:39:06Z http://journalarticle.ukm.my/14122/ Macroeconomic uncertainty and corporate capital structure: evidence from the Asia Pacific Region Chow, Yee Peng Junaina Muhammad, A.N. Bany-Ariffin, Cheng, Fan Fah The purpose of this paper is to examine the impact of macroeconomic uncertainty on corporate capital structure. This paper considers a wide spectrum of proxies for macroeconomic uncertainty to identify which types of macroeconomic uncertainty are important to the capital structure decisions of a sample of listed firms from seven Asia Pacific countries for the period 2004-2014. The regression models are estimated using the robust two-step system generalised method of moments (GMM) estimator. The results generally provide robust evidence of the negative effect of macroeconomic uncertainty on Asia Pacific firms’ capital structure using different proxies for macroeconomic uncertainty. When the aggregate data are split into developing and developed countries, this paper continues to find some evidence supporting the negative association between macroeconomic uncertainty and capital structure. The results also indicate that the three broad classifications of macroeconomic uncertainty, i.e., external sources of macroeconomic uncertainty, domestic sources of macroeconomic uncertainty, and volatility as a macroeconomic outcome, significantly affect corporate capital structure. Further analyses reveal that the capital structures of firms in the developing and developed countries are affected by different types of macroeconomic uncertainty. Hence, policy makers should strive to devise suitable course of actions to overcome the unfavourable outcomes stemming from the volatility in the macroeconomic environment, bearing in mind of the multidimensional aspects of macroeconomic uncertainty. Penerbit Universiti Kebangsaan Malaysia 2019 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/14122/1/jeko_53%282%29-8.pdf Chow, Yee Peng and Junaina Muhammad, and A.N. Bany-Ariffin, and Cheng, Fan Fah (2019) Macroeconomic uncertainty and corporate capital structure: evidence from the Asia Pacific Region. Jurnal Ekonomi Malaysia, 53 (2). pp. 1-25. ISSN 0127-1962 http://www.ukm.my/fep/jem/content/2019-2.html
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
language	English
description	The purpose of this paper is to examine the impact of macroeconomic uncertainty on corporate capital structure. This paper considers a wide spectrum of proxies for macroeconomic uncertainty to identify which types of macroeconomic uncertainty are important to the capital structure decisions of a sample of listed firms from seven Asia Pacific countries for the period 2004-2014. The regression models are estimated using the robust two-step system generalised method of moments (GMM) estimator. The results generally provide robust evidence of the negative effect of macroeconomic uncertainty on Asia Pacific firms’ capital structure using different proxies for macroeconomic uncertainty. When the aggregate data are split into developing and developed countries, this paper continues to find some evidence supporting the negative association between macroeconomic uncertainty and capital structure. The results also indicate that the three broad classifications of macroeconomic uncertainty, i.e., external sources of macroeconomic uncertainty, domestic sources of macroeconomic uncertainty, and volatility as a macroeconomic outcome, significantly affect corporate capital structure. Further analyses reveal that the capital structures of firms in the developing and developed countries are affected by different types of macroeconomic uncertainty. Hence, policy makers should strive to devise suitable course of actions to overcome the unfavourable outcomes stemming from the volatility in the macroeconomic environment, bearing in mind of the multidimensional aspects of macroeconomic uncertainty.
format	Article
author	Chow, Yee Peng Junaina Muhammad, A.N. Bany-Ariffin, Cheng, Fan Fah
spellingShingle	Chow, Yee Peng Junaina Muhammad, A.N. Bany-Ariffin, Cheng, Fan Fah Macroeconomic uncertainty and corporate capital structure: evidence from the Asia Pacific Region
author_facet	Chow, Yee Peng Junaina Muhammad, A.N. Bany-Ariffin, Cheng, Fan Fah
author_sort	Chow, Yee Peng
title	Macroeconomic uncertainty and corporate capital structure: evidence from the Asia Pacific Region
title_short	Macroeconomic uncertainty and corporate capital structure: evidence from the Asia Pacific Region
title_full	Macroeconomic uncertainty and corporate capital structure: evidence from the Asia Pacific Region
title_fullStr	Macroeconomic uncertainty and corporate capital structure: evidence from the Asia Pacific Region
title_full_unstemmed	Macroeconomic uncertainty and corporate capital structure: evidence from the Asia Pacific Region
title_sort	macroeconomic uncertainty and corporate capital structure: evidence from the asia pacific region
publisher	Penerbit Universiti Kebangsaan Malaysia
publishDate	2019
url	http://journalarticle.ukm.my/14122/ http://journalarticle.ukm.my/14122/ http://journalarticle.ukm.my/14122/1/jeko_53%282%29-8.pdf
first_indexed	2023-09-18T20:06:23Z
last_indexed	2023-09-18T20:06:23Z
_version_	1777407186607013888

Macroeconomic uncertainty and corporate capital structure: evidence from the Asia Pacific Region

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