Economic Policy Uncertainty Sense and the Debt Structure of Tourism Corporations: Evidence from China Listed Companies

Abstract

In recent years, the extended financing periods for tourism enterprises have become increasingly evident, presenting a significant threat to the sustainable and healthy development of both businesses and the industry. Concurrently, the rising uncertainty index associated with domestic economic policies appears to be a key factor contributing to the growing reliance on short-term financing among tourism enterprises. Through the establishment of a theoretical model and empirical analysis of microdata from listed tourism firms between 2002 and 2022, this paper demonstrates that an increase in Economic Policy Uncertainty (EPU) corresponds with a heightened proportion of short-term financing for these enterprises. However, the effects manifest differently across three aspects: financing costs, external financing constraints, and investment returns. Further analysis reveals that EPU contributes to a decrease in banking and financial liabilities for tourism companies. As a result, these firms are likely to seek non-financial sources for their short-term funding needs.