The response of firms' leverage to uncertainty: Evidence from UK public versus non-public firms
This paper empirically investigates the effects of uncertainty on firms' leverage. The analysis is carried out for a large panel of public and non-public UK manufacturing firms over 1999-2008. The empirical results provide evidence that firms use less short-term debt as they go through periods of high uncertainty. The leverage of non-public firms is more sensitive to idiosyncratic uncertainty in comparison to their public counterparts, yet macroeconomic uncertainty affects both types of frms similarly. We fnally end our investigation showing that the total impact of either type of uncertainty on firms' leverage is related to the amount of the cash bu er each firm carries.
|Date of creation:||Oct 2010|
|Date of revision:||Oct 2010|
|Contact details of provider:|| Postal: |
Phone: +44 114 222 3399
Fax: + 44 (0)114 222 3458
Web page: http://www.shef.ac.uk/economics
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:shf:wpaper:2010019. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jacob Holmes)
If references are entirely missing, you can add them using this form.