D22 - Firm Behavior: Empirical AnalysisReturn

Economic policies in different regions in China vary greatly. This study examines the impact of Chinese provincial economic policy uncertainty (EPU) on firms' digital transformation using panel data of A-share listed Chinese firms over the 2007-2021 period using a high-dimensional fixed effects model. Notably, we use provincial-level EPU data to explore this impact and explore the moderating effect of leadership characteristics. Results reveal a U-shaped relationship between provincial EPU and firms' digital transformation. We also find that leaders' average age and gender influence the effect of EPU on digital transformation. The findings highlight the importance of economic policy consistency across China and encourage firms to improve board diversity to cope with EPU.

Differences in Capital Structure of Publicly Traded Companies in Europe and USA The paper aims at analysing the difference in capital structure and debt maturity choices of firms in Europe and in the USA. Employing logical and comparative study of theoretical knowledge in accordance with analysis of empirical data, the authors define the variations in leverage and long-term debt ratios. Specifically for comparability of studied markets, the analysis was based on financial data of companies that are members of STOXX600, which is considered the primary index for the European market, and S&P 500, which is considered one of the best representations of the US market. Based on the results, we can assume that there exist statistically significant differences. Companies in the USA tend to use more debt, especially long-term debt, than companies in Europe.

Corporate innovations are a central part of a country's economic activity. They foster and improve competitiveness, which ultimately leads to economic growth and progress. In this study, we focus on the post-communist European region, where corporations operate under uncertain conditions. Utilizing a sample with almost 100,000 firm level observations over the period from 2001 to 2013, we analyse effects of uncertainty steaming from corruption environment on innovation decisions of the Central European private firms. We find that domestic firms and firms with dispersed ownership innovate less when business and municipal uncertainty conditions increase. When firms are unsure whether they will be blocked by local bureaucrats from capitalizing on their innovation, they scale down their efforts. However, this result disappears for firms with foreign majority ownership. We hypothesize that foreign controlled firms have cleared all uncertainties before they entered the foreign market.

Corporate Sector-Selected Aspects of Empirical Analysis of the EU Member States The paper attempts to shed light on selected problems of mainly non-fi nancial corporations of EU Member States in the period 1995-2013 (2014) using financial balance sheets (SNA, 2008). The relations between domestic sectors and non-residents have revealed that the Member States have been mainly debtors during the examined period. Having measured leverage (ratio of debt to GDP created in the sector of non-financial corporations) we have found out the increase of the ratio in the crisis period (2008-2013) in the sample of 17 member states. As concerns the ratio of debt to shares we have stressed the heterogeneity in the sample of 8 eurozone countries. The heterogeneity has been discovered also examining the role of trade credit as an alternative source of financing in the random effects model (panel analysis).