What question did this study set out to answer?

The aim is to investigate how economic uncertainty affects corporate leasing decisions and earnings growth.

July 26, 2026

Too Uncertain to Lease? Economic Uncertainty and Corporate Leasing

YJYifan JiangRenmin University of China WLWenting LiaoRenmin University of China GXGang XiaoRenmin University of China

Key Points

The aim is to investigate how economic uncertainty affects corporate leasing decisions and earnings growth.
Analyzed leasing behavior in relation to economic predictability and firm financial health
Examined the impact of economic expansions and decision delays on leasing activity
Firms lease significantly less during periods of economic unpredictability
The negative effect of uncertainty is stronger in firms facing higher financial constraints or risks
Leasing correlates with increased earnings growth in high uncertainty environments

Abstract

ABSTRACT Leasing provides firms with a flexible way to seize business opportunities. In this study, we provide robust evidence that firms lease less when the economy becomes less predictable. This effect is more pronounced for firms with greater financial constraints or higher firm risk. Firms' dependence on leasing to acquire growth opportunities amplifies this negative impact, while economic expansions and risks associated with delayed decisions partially offset it. Moreover, leasing contributes to higher earnings growth when macroeconomic uncertainty is greater.

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Cite This Study

Jiang et al. (Thu,) studied this question.

synapsesocial.com/papers/6a65a91fd3aea3239cd791a8 https://doi.org/https://doi.org/10.1111/fima.70059

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