Browsing by Subject "Financial constraints"
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Item Embargo Economic policy uncertainty and green innovation: evidence from China(Elsevier, 2022-11-11) Cui, X.; Wang, C.; Şensoy, Ahmet; Liao, J.; Xie, X.Frequent economic policy adjustments lead to significant increases in economic policy uncertainty (EPU). Few studies have investigated whether EPU influences corporate green innovation. Using a sample of Chinese A-share listed firms from 2005 to 2019, we find strong evidence that EPU is significantly and negatively associated with corporate green innovation. Our moderating effect analysis shows that financial constraints exacerbate the negative impact of EPU on green innovation, while government environmental subsidies can significantly mitigate the negative EPU effect. Moreover, the negative relationship between EPU and green innovation is salient in privately owned enterprises, firms with less industry competition, and firms in regions with weak intellectual property protection. This study has important implications for policymakers regarding increasing government expenditure on environmental protection and strengthening intellectual property protection to promote corporate green innovation.Item Open Access Green credit policy and firm performance: What we learn from China(Elsevier BV, 2021-09) Yao, S.; Pan, Y.; Şensoy, Ahmet; Uddin, G. S.; Cheng, F.We explore the effect of green credit policy on firm performance of listed firms in China. We find that green credit policy reduces firm performance in heavily polluting industries. This effect is more prominent in state-owned enterprises, firms with large size, high institutional ownership, high analyst coverage and during high economic policy uncertainty period. Moreover, we observe that green credit policy decreases heavily polluting firms' performance by increasing firm financing constraints and decreasing investment level. Our results help to restrain heavily polluting enterprises and promote industrial transformation in developing markets.Item Open Access The impact of liquidity crises on cash flow sensitivities(Elsevier B.V., 2017) Drobetz, W.; Haller, R.; Meier, I.; Tarhan, V.We examine the relationship between liquidity crises and frictions in raising funds, and find that both the gap between the cash flow sensitivities of financially healthy and weak firms and the cash flow sensitivities of healthy and weak firms themselves are positively correlated with the severity of liquidity crises. Using a multi-equation model of cash flow sensitivities, we find that moderate liquidity crises mostly affect firms’ financing activities. The recent financial crisis was especially severe for financially weak firms and curtailed both their investment and financing decisions. Financially healthy firms were able to protect their investments by maintaining financial flexibility. © 2017 Board of Trustees of the University of Illinois