Article
Business, Finance
Ling Ou, Zhibin Zhang, Renyu Li, Zhuo Chen
Summary: Using a sample of Chinese A-share-listed manufacturing companies from 2011 to 2020, this study analyzed the impact of economic policy uncertainty (EPU) on business performance. The findings indicate that EPU has a negative effect on improving business performance, but service transformation can effectively counteract this adverse impact, with the strength of the effect increasing with the depth of service transformation. Furthermore, embedded service transformation is more effective than mixed-service transformation in mitigating the adverse effects of EPU on business performance. The moderate effect is more pronounced in non-state-owned enterprises and low-sale growth firms. The robustness of the results is confirmed after controlling for various variables, addressing endogeneity issues, and including additional control variables.
INTERNATIONAL REVIEW OF ECONOMICS & FINANCE
(2023)
Article
Business, Finance
Jorge Sepulveda Velasquez, Pablo Tapia Grinen, Boris Pasten Henriquez
Summary: Based on an analysis of 445 companies from 20 countries, this study finds that companies subject to the Mandatory Dividend Rules (MDR) have decreased investment opportunities compared to firms without MDR, especially under uncertain conditions. The evidence supports the notion that being exposed to MDR does not favor investment opportunities, particularly in the presence of uncertainty. These findings have important implications for policymakers.
FINANCE RESEARCH LETTERS
(2023)
Article
Economics
Shaobo Long, Hongxia Pei, Hao Tian, Fangfang Li
Summary: Investment has played a significant role in driving economic growth in China, but the growth rate of fixed asset investment in the country has shown a downward trend in recent years. Identifying the main influencing factors of China's investment is crucial for formulating stable investment policies.Using the nonlinear autoregressive distributed lag (NARDL) model, this study found that economic policy uncertainty, capital cost, and raw material cost have asymmetrical impacts on China's fixed asset investment.
ECONOMIC ANALYSIS AND POLICY
(2021)
Article
Economics
Tiezhen Yuan, Ji (George) Wu, Ni Qin, Jian Xu
Summary: This study investigates the impact of economic policy uncertainty (EPU) on corporate social responsibility (CSR) engagement in Chinese listed firms. The findings show a significant positive relationship between EPU and firms' CSR engagement. The results support the "sending signal hypothesis" that firms tend to adopt more CSR engagement during periods of higher uncertainty to signal their stakeholders.
ECONOMIC MODELLING
(2022)
Article
Economics
Hyunduk Suh, Jin Young Yang
Summary: The study reveals that global Economic Policy Uncertainty (EPU) and non-EPU global uncertainty measures have different effects on corporate investment, with EPU measures negatively affecting investment and non-EPU measures having positive effects.
Article
Economics
Asei Ito, Jaehwan Lim, Hongyong Zhang
Summary: This study constructs an original economic policy uncertainty (EPU) index, called XiEPU, using a text dataset of the Chinese President's speeches and reports. It finds that XiEPU moderately correlates with a previous study's representative EPU but exhibits notably different peaks, with spikes in April 2016 and January 2017. Panel data analysis of firm-level data from 2012 to 2019 reveals that a higher value of XiEPU is associated with a lower investment rate at the quarterly level, with heterogeneous effects observed among firms and periods.
CHINA ECONOMIC REVIEW
(2023)
Article
Business
Gaurav Gupta, Jitendra Mahakud, Vishal Kumar Singh
Summary: This study examines the impact of economic policy uncertainty (EPU) on the investment-cash flow sensitivity (ICFS) of Indian manufacturing firms. The findings show that EPU increases ICFS, particularly during crisis periods. Smaller, younger, and standalone firms are more affected by EPU compared to larger, matured, and business group affiliated firms. Additionally, EPU reduces corporate investment and has a greater negative effect on financially constrained firms.
INTERNATIONAL JOURNAL OF EMERGING MARKETS
(2022)
Article
Business, Finance
Tingli Liu, Xiao Chen, Songling Yang
Summary: The impact of economic policy uncertainty (EPU) on China's high-tech manufacturing industry's investment decision has been studied empirically. It is found that in higher EPU situations, companies in this industry tend to prioritize innovation investment, with higher capital intensity firms more likely to decrease overall investment.
PACIFIC-BASIN FINANCE JOURNAL
(2022)
Article
Business, Finance
Xieyang Shen, Sijie Yang, Yulin Chen, Jianyu Zeng
Summary: In periods of high economic policy uncertainty, managers are more inclined to learn from their peers' stock prices for investment decisions, especially for firms with high operating uncertainty, low price informativeness, and limited access to economic policy information. This learning behavior positively impacts firm value.
PACIFIC-BASIN FINANCE JOURNAL
(2022)
Article
Business, Finance
Tanveer Ahsan, Bakr Al-Gamrh, Sultan Sikandar Mirza
Summary: This study examines the impact of firm business strategy on sustainable financial growth during economic policy uncertainty. The findings indicate that economic policy uncertainty negatively affects sustainable financial growth of Chinese firms. However, the defensive business strategy helps mitigate the negative impact, while the analytical business strategy alleviates the negative impact. These results provide guidance for corporations in dealing with policy uncertainties effectively.
FINANCE RESEARCH LETTERS
(2022)
Article
Environmental Studies
Tania Klayme, Korhan K. Gokmenoglu, Bezhan Rustamov
Summary: This study investigates the impact of Economic Policy Uncertainty (EPU) on the investment decisions of the top 5 gold mining countries during the COVID-19 Pandemic. The results show a negative effect of the EPU index on gold mining companies' investment decisions. Quantile regression analysis reveals that the estimated coefficients for the low and high quantiles are significant, indicating risk aversion and dampened investment projects during periods of uncertainty.
Article
Environmental Sciences
Daleng Xin, Liguo Xin
Summary: This study conducts theoretical and empirical research on the impact of economic policy uncertainty on PM2.5 pollution. The results show that an increase in economic policy uncertainty leads to a decrease in PM2.5 pollution, but it also hinders corporate innovation activities. Additionally, the impact of economic policy uncertainty on PM2.5 pollution varies across different countries.
ENVIRONMENTAL SCIENCE AND POLLUTION RESEARCH
(2022)
Article
Economics
Hong Vo, Quoc-Dat Trinh, Minh Le, Thuy-Ngan Nguyen
Summary: The study reveals robust interaction effects of economic policy uncertainty (EPU) and peers' stock prices on firm investment, especially during elevated EPU periods. Furthermore, it is found that this influence is more pronounced in highly competitive environments or among financially constrained firms.
ECONOMIC ANALYSIS AND POLICY
(2021)
Article
Business
Han Zhou, Xiang Zhang, Rui Ruan
Summary: This study constructs a firm-level Economic Policy Uncertainty (EPU) index using a text mining method and finds that a firm's perception of EPU decreases corporate innovation efficiency. The study also suggests that traditional EPU indicators become statistically insignificant after considering macroeconomic variables, highlighting the importance of incorporating firm-specific perceptions of EPU.
JOURNAL OF INNOVATION & KNOWLEDGE
(2023)
Article
Economics
Muhammad Ilyas, Aamir Khan, Muhammad Nadeem, Muhammad Tahir Suleman
Summary: This study found that both oil price uncertainty and economic policy uncertainty have a negative impact on corporate investment, especially in oil-producing countries. Market volatility and global financial crises also significantly influence the relationship between corporate investment and uncertainty factors.
Article
Business, Finance
Jan Jakub Szczygielski, Ailie Charteris, Princess Rutendo Bwanya, Janusz Brzeszczynski
Summary: This study investigates the narrative reflected by Google search trends (GST) and constructs a neutral and general stock market-related GST index. The index is found to peak around significant events that impact global financial markets and is closely correlated with established measures of market uncertainty. It performs well in approximating and predicting systematic stock market drivers and factor dispersion underlying return volatility both in-sample and out-of-sample. The study contributes to the understanding of the information reflected by GST and their relationship with stock markets and suggests the potential for further applications using internet search data.
INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS
(2024)
Article
Business, Finance
Jimin Wang, Choy Yeing (Chloe) Ho, Yuan George Shan
Summary: This paper examines the impact of cybersecurity risk on corporate innovation and finds that risk-taking and precautionary savings are two important channels through which cybersecurity risk affects innovation activities. By using textual analysis and machine learning techniques on a sample of US-listed firms, the study shows a negative relationship between cybersecurity risk and corporate innovation. The results remain robust even after addressing potential endogeneity biases. It is further revealed that firms with lower risk tolerance and lower cash savings are more affected, especially smaller financially constrained firms operating in high cybersecurity risk and technology-intensive industries.
INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS
(2024)
Review
Business, Finance
William Forbes
Summary: This paper compares the contrasting views of Taffler, Tucker, and Gigerenzer on the unconscious. Taffler sees the unconscious as an obstacle to investment decisions, while Gigerenzer believes it plays a role in promoting good investment choices. The paper emphasizes the importance of decision-making under uncertainty and the influence of the investment context on the reality of the unconscious.
INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS
(2024)
Article
Business, Finance
Nick Christie, Hakan Jankensgard, Nicoletta Marinelli
Summary: How firms cope with tail risk is an under-researched problem in the literature on corporate risk management. This paper presents stylized facts on the nature of revenue shocks based on 65 years worth of Compustat data. The analysis suggests that liquidity is the decisive factor in mediating the effects of revenue shocks on employment, while equity capital and operating flexibility do not robustly buffer against Black Swans.
INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS
(2024)
Article
Business, Finance
Jae Hwan Ahn, Sunhwa Choi, Gi H. Kim, Sewon Kwon
Summary: An increasing number of firms repurchase debt and recognize accounting losses. This study examines the effect of reporting incentives on debt repurchase decisions and finds that managers tend to recognize more losses when earnings exceed the maximum performance level set in bonus contracts. However, these bonus-driven debt repurchases do not significantly affect shareholder value.
INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS
(2024)
Article
Business, Finance
Kai Yan, Ziyi Zhang, Lisi Yang, Yuqiang Cao, Yaowen Shan
Summary: The development of a national innovation system relies on the development of financial markets. This study explores the impact of financial innovation on green innovation within the national innovation system framework. The study finds that financial innovation increases firms' loan ratio, reduces the cost of debt, and improves corporate maturity match, thereby promoting green innovation.
INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS
(2024)
Article
Business, Finance
Zhang-HangJian Chen, Wang-Long Wu, Sai-Ping Li, Kun Bao, Kees G. Koedijk
Summary: This research investigates the dynamic interplay between information diffusion on social media platforms and the co-movement of excess stock returns. The findings reveal that stocks with higher information diffusion exhibit swifter responsiveness to new information and demonstrate superior performance in hedging strategies.
INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS
(2024)
Article
Business, Finance
Theodore Panagiotidis, Georgios Papapanagiotou, Thanasis Stengos
Summary: The aim of this paper is to identify potential determinants of bitcoin returns. They consider various determinants including economic, financial, technology-related factors, uncertainty, and attention indices. Through the use of LASSO models estimated using both frequentist and Bayesian methods, they evaluate the ability of these estimators to forecast bitcoin returns. The results indicate that a Bayesian LASSO model considering stochastic volatility and the leverage effect provides the most accurate forecasts, allowing for the identification of alternative drivers and analysis of underlying mechanisms affecting bitcoin returns.
INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS
(2024)
Article
Business, Finance
Weijie Tan, Minghao Shen, Yubiao Pang, Yiqian Liu
Summary: This study measures the agglomeration of bank branches around Chinese listed enterprises and reveals that bank agglomeration has a positive impact on corporate environmental responsibility (CER) practices. It reduces financial constraints on enterprises and fosters green business practices. Furthermore, the clustering of state-owned, local, and foreign bank branches, as well as the entry and exit of bank branches, improve CER performance.
INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS
(2024)
Article
Business, Finance
Wenyun Yao, Hang Yang, Xiulian Shi, Zilong Song
Summary: This empirical study examines the impact of top management team stability on corporate debt concentration. The findings suggest that firms with higher TMT stability tend to have less concentrated debt structures. The relationship is stronger in samples with higher default risk, lower liquidation values, and lower accounting quality.
INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS
(2024)
Article
Business, Finance
Renaud Beaupain, Yann Braouezec
Summary: Under Basel III, banks are required to maintain two Tier 1 capital ratios that treat risky assets differently. The CARW framework is utilized by the Basel Committee to determine the binding capital ratio, but errors can occur due to simplifying assumptions made by the regulator.
INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS
(2024)
Article
Business, Finance
Di Wang, Liangju Guo, Saipeng Xing
Summary: This study examines the impact of compulsory food safety liability insurance (CFSLI) on excess cash holdings and finds that CFSLI significantly reduces such holdings. It also highlights the role of media coverage and marketization level in influencing the effectiveness of CFSLI in reducing excess cash holdings.
INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS
(2024)
Article
Business, Finance
Po-Hsin Ho, Chia-Wei Huang, Chih-Yung Lin, Ju-Fang Yen
Summary: This study examines the impact of corporate risk culture on innovation in U.S. firms using stock market beta. The results suggest that firms with a prominent high-risk culture tend to invest more in innovation and achieve greater innovation outcomes. These firms usually employ overconfident or generalist managers and provide them with incentive compensation to promote innovation. Further analysis shows that the influence of risk culture on innovation is particularly prominent in innovative industries. The findings highlight the advantage of firms with a high-risk culture in seizing innovative growth opportunities.
INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS
(2024)
Article
Business, Finance
Egidio Palmieri, Greta Benedetta Ferilli, Yener Altunbas, Valeria Stefanelli, Enrico Fioravante Geretto
Summary: The recent bank failures have shown that improving banking sector supervision is crucial. This study examines the joint effect of a bank's business model and its environmental, social, and governance performance on its risk profile. The findings suggest that different types of banks can mitigate risk by improving specific aspects of their performance.
INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS
(2024)
Article
Business, Finance
Gulnur Muradoglu, Ni Peng, Huai Qin, Chunling Xia
Summary: The study finds that early announcements in mergers and acquisitions attract significant investor attention, and have a positive impact on the short-term value effect of the deals. However, this relationship is reversed after merger integration, resulting in a lower long-term firm value. For early-announced deals with low investor attention, neither the short-term value effect nor the long-term price reversal exists.
INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS
(2024)
