The Effect Of Economic Policy Uncertainty On Corporate Investment: International Evidence
Abstract
Economic policy uncertainty has been a major topic among researchers, where they are
considered to have significant impacts on many other aspects of the economy activities
in general and the firms, specifically. By observing the 18,962 firms wordwide over a
course of 20 years from 2000 to 2019, I find significant evidence supporting the
negative effect of economic policy uncertainty on the corporate investment at
international level. By processing the dataset at global scale, the research provides a
new standpoint to observe the impact of economic policy uncertainty on the overall
global economy, instead of the singular large economies such as the United States or
China. In addition, the study is expanded by determining the impact of EPU on
corporate investment according to income level by separating the data set into two
samples. One sample consists of high-income nations, whereas the other consists of
middle-income and low-income nations. In a setting of uncertainty, the findings may
assist investors in allocating their investment portfolios effectively to different
economies based on their size of economies.