by Chow Yee Peng*, Junaina Muhammad, Bany Ariffin Amin Noordin, Cheng Fan Fah

Universiti Putra Malaysia

Full Text:  Abstract :  This paper investigates the influence of export volatility on corporate financing decisions of a sample of non-financial firms listed on the Australian Securities Exchange over the period 2004-2014. The GARCH model is employed to model export volatility. Using a dynamic panel data method, namely the robust two-step system GMM estimation procedure, the results show that export volatility has a significant negative effect on the financing decisions of Australian firms. The results also reveal that while long-term debt is affected by export volatility, similar observation does not hold for short-term debt. This indicates that Australian firms are chiefly concerned about the adverse effect of export volatility in the long-run. The results also provide evidence of the importance of accounting for the effects of the Global Financial Crisis. Policy implications are derived from the findings.

Keywords: Corporate financing decisions, Capital structure, Leverage, Export volatility, System GMM, GARCH

Updated:: 22/02/2022 [syazmer]