The Impact Of Economic Policy Uncertainty On Corporate Debt Risk

China is in a special period of slowing economic growth and frequent occurrence of internal and external risk events.Economic development is facing the dual pressure of uncertainties and rising debt risks of market entities.On the one hand,in order to maintain the steady growth of the economy and the normal operation of the macroeconomic system,the government has introduced a series of economic policy adjustment plans.However,the uncertainty of economic policies induced by frequent regulatory policies not only affects the total social output and employment at the macro level.,Economic development has a strong short-term negative impact,increasing the downward pressure on the economy,and also impacting the cash flow,sustainable growth,investment and financing behavior,and innovation investment of enterprises at the micro level;on the other hand,the volatility of the market environment Affected by the increase of financial crisis and uncertainty,the debt scale of China’s non-financial enterprises continues to rise,and the overall debt risk rises.Once the debt risk is concentrated and erupts,it will have a severe impact on the entire market system and damage the healthy development of the economic system.For this reason,market departments and policy makers attach great importance to economic policy uncertainty and debt risk issues.With the rapid development of the market,the relationship between macro and micro entities is getting closer,and the operation of micro entities is affected and constrained by changes in the macroeconomic environment.The macroeconomic policy has dual attributes that affect the macroeconomic and institutional environment.The uncertainty of the economic policy caused by its change will lead to changes in the external operating environment of the enterprise,which will have a negative impact on the enterprise’s strategy formulation,investment and financing decisions,output levels,and cash flow conditions.Significant influence.Therefore,it is no coincidence that the impact of economic policy uncertainty and high corporate debt risk exist simultaneously in the market,and there is a linkage mechanism between "economic policy uncertainty-corporate debt risk".This paper introduces economic policy uncertainty into the research system of corporate debt risk,and explores the impact of economic policy uncertainty on corporate debt default risk,which is important for a deeper understanding of economic policy uncertainty and a more comprehensive understanding of corporate debt risk.At the same time,it also provides a new perspective for the effective implementation of economic policies,the sustainable and healthy development of the macro economy,and the internal governance of corporate debt risks.This paper takes the Shanghai and Shenzhen A-share non-financial companies from 2007 to 2021 as the research sample,combined with the economic policy uncertainty index constructed by Baker et al.,to empirically test the impact of economic policy uncertainty on my country’s corporate debt risk.The research shows that:(1)Economic policy uncertainty will significantly increase the debt risk level of enterprises,that is,the higher the external economic policy uncertainty,the higher the debt risk level of enterprises.After controlling endogenous problems by substituting variables and using instrumental variables,the conclusion is still robust;(2)The promotion effect of economic policy uncertainty on corporate debt risk is more obvious in non-state-owned enterprises and manufacturing enterprises;(3)Enterprises The operating capacity,investment and financing behavior,and the shareholding ratio of institutional investors will affect the degree of economic policy uncertainty on corporate debt risk.Based on this,this paper argues that:(1)The government should avoid "changing orders overnight" in the process of formulating and implementing policies,focus on improving the efficiency of policy implementation,prevent "big thunder and little rain" in the process of policy implementation,and improve policy(2)In the process of economic development and construction,we must thoroughly implement the development requirements of the report of the 20 th National Congress of the Communist Party of China,accelerate the construction of a modern economic system,continuously improve the ability of the financial market to serve real enterprises,and create new opportunities for enterprises.A more friendly external financing environment;(3)Enterprises should continuously strengthen risk prevention awareness,improve risk response capabilities,and establish a complete risk management system.