Does economic policy uncertainty affect investment sensitivity to peer's stock price?
Ngan, Nguyen Thi Thuy
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This paper examines the impact of economic policy uncertainty on firm investment sensitivity to peer’s stock price. During an uncertain time, firm investment is positively related to peers’ stock price, especially for follower firms with high financial constraints and firms whose managers have high career concerns. The findings of this paper are in line with social learning theory and herding behavior.