arbiter
JournalsAccount

Geopolitical risk and firm’s informal financing: International evidence

Muhammad Yusuf Saleem et al.

Australian Journal of Management2026https://doi.org/10.1177/03128962261425901article
AJG 2ABDC A
Weight
0.50

Abstract

Utilizing the substitution hypothesis and the economic model of trade credit as conceptual frameworks, we find that heightened geopolitical risk (GPR) correlates with an increase in firms’ access to informal financing (FAIF), accompanied by a decrease in supply of informal financing (FSIF) within an international context. Moreover, firms are net receivers of informal financing amid heightened GPR. These core findings persist even after controlling for other external uncertainties, using alternative proxies for firms’ informal financing decisions, applying a 1-year lag to GPR, and analysing a reduced sample. Furthermore, a firm’s nature of goods, the financing frictions, relationship-specific investments, internationalization level and a country’s creditor rights protection, financial openness and financial development levels play a significant role in the relationship between GPR and firms’ informal financing decisions. JEL Classification: F51, F34, G32, D81

Open via your library →

Cite this paper

https://doi.org/https://doi.org/10.1177/03128962261425901

Or copy a formatted citation

@article{muhammad2026,
  title        = {{Geopolitical risk and firm’s informal financing: International evidence}},
  author       = {Muhammad Yusuf Saleem et al.},
  journal      = {Australian Journal of Management},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1177/03128962261425901},
}

Paste directly into BibTeX, Zotero, or your reference manager.

Flag this paper

Geopolitical risk and firm’s informal financing: International evidence

Flags are reviewed by the Arbiter methodology team within 5 business days.

Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.