The Impact Of Economic Policy Umcertainty On Corporate Investment And Financing Behavior

The Sino-US trade war conflict is a major event affecting the global political and economic structure,and will inevitably have a profound impact on the microeconomic behavior of companies in various countries,such as investment and financing.This paper takes the Sino-US trade war as the background,combines the 2017-2019 Shanghai and Shenzhen A-share listed companies’ individual stock returns and trade war event data to conduct event research,calculates the cumulative abnormal returns of individual stocks to trade war events,and constructs trade war policies.Uncertainty proxy indicators.Then,using the above listed companies’ financial data from 2015 to 2019 as a sample,to study the impact of economic policy uncertainty caused by the trade war on the behaviors of corporate investment and financing,and to further analyze the mechanism of consumer demand,investment opportunities and financing constraints,as well as corporate scale and property rights.Heterogeneity test for nature and growth.The main contents of this article are as follows:First,combined with trade war events,the market model and the three-factor model are used to calculate the average abnormal return of individual stocks to related events,and the weighted average is converted into the sensitivity of companies to trade war policy adjustments.By ranking the industries on the policy sensitivity,it is concluded that the industries with higher policy adjustment sensitivity and the trade policy adjustment between the two countries mainly involve agriculture,metal and mineral products mining and selection,food processing,machinery and other manufacturing industries,and information and communication technology.industries are highly overlapping.Therefore,the Sino-US trade war event has caused stock market volatility,and the proxy indicator of trade war policy uncertainty constructed based on this is more scientific.Second,economic policy uncertainty caused by the trade war will reduce corporate investment,and the higher the sensitivity of companies to policy adjustments,the greater the decline in investment.The results of the impact mechanism show that the uncertainty of economic policy changes will firstly inhibit enterprise investment by affecting the market demand of enterprise products and then reducing its sales revenue;secondly,it will reduce enterprise investment by reducing enterprise investment returns,affecting managers’ ability to predict investment and investment willingness,etc.Finally,it will increase the external financing constraints of enterprises by increasing the cost of using external funds,reduce their financial support,and thus damage their investment.Further heterogeneity test shows that the policy uncertainty has a negative effect on the investment of enterprises with different property rights and different growth potentials,and with the increase of policy uncertainty,the investment of these types of enterprises decreases more.It shows that the inhibitory effect of trade war economic policy uncertainty on corporate investment does not have differences in the nature of corporate property rights and growth.Third,from the perspective of the overall debt scale,the uncertainty of the trade war policy reduces the overall asset-liability ratio of enterprises,and the higher the sensitivity of the enterprise to the trade war policy,the stronger the inhibitory effect.The main reason is that the uncertainty of economic policies has increased the internal and external risks of enterprises,and the demand and supply of external funds of enterprises have decreased at the same time.Further examination of the debt scale of enterprises of various maturities shows that the policy uncertainty of the trade war makes the short-term debt of enterprises decrease more significantly,while the long-term debt has no significant change.The main reason is that Chinese enterprises generally have "short-term loans and long-term investment" behavior,and their short-term debt financing accounts for a large proportion,and the negative impact of the trade war on their short-term liabilities is also more significant.Further testing of property rights and scale heterogeneity shows that the overall debt scale of enterprises with different property rights and different scales has decreased significantly.The inhibitory effect of trade war policy uncertainty on the overall debt scale of enterprises does not distinguish between the nature of corporate property rights and the heterogeneity of enterprise scale.In terms of the scale of long-term and short-term liabilities,there is only heterogeneity in the scale of enterprises.In the context of the Sino-US trade war,this paper quantifies the sensitivity of Chinese companies to trade war policy adjustments and their impact on corporate investment and financing decisions.It not only enriches the research results of corporate finance combining macro and micro,but also provides more theoretical basis and empirical support for the scientific decision-making of the government,effective adjustment of investment and financing scale of the enterprise managers and rational investment of the investors in the capital market under the uncertainty of economic policy.