Risks and financing decisions: dynamic panel data evidence from the Philippines
Using a sample of listed non-financial Philippine firms over the period 2004-2014, this study empirically examines the effects of macroeconomic and firm-specific uncertainty on firm leverage. We employ a dynamic panel data method, namely the robust two-step system GMM estimator on both the book and...
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| Main Authors: | , , , |
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| Format: | Conference or Workshop Item |
| Language: | English |
| Published: |
Panoply Consultancy
2017
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| Online Access: | http://psasir.upm.edu.my/id/eprint/64959/1/2017-6.pdf http://psasir.upm.edu.my/id/eprint/64959/ |
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| Summary: | Using a sample of listed non-financial Philippine firms over the period 2004-2014, this study empirically examines the effects of macroeconomic and firm-specific uncertainty on firm leverage. We employ a dynamic panel data method, namely the robust two-step system GMM estimator on both the book and market leverage ratios. We further analyze the effects of macroeconomic and firm-specific uncertainty on firm debt maturity. The results provide strong evidence of the negative effects of macroeconomic and firm-specific uncertainty on firm leverage. The results also indicate that while short-term debt is adversely affected by both firm-specific and macroeconomic uncertainty, long-term debt is only affected by macroeconomic uncertainty. This implies that although the Philippine firms take into account both firm-specific and macroeconomic uncertainty in their financing decisions in the short-run, they are only concerned about the adverse effects of macroeconomic uncertainty in the long-run. |
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