| dc.description.abstract | This study examines how economic policy uncertainty affects the sensitivity of
firm investment to the stock price for a sample of 22 countries during the period from 1990
to 2021. The empirical results indicate that the level of sensitivity of firm investment to the
stock price is positively correlated with economic policy uncertainty. In addition, this
relationship remains robust after adding various control variables for firm characteristics,
macroeconomic factors, and country-level variables. Further investigation shows that
investment irreversibility, financial constraints, external finance dependence, market
competition, information asymmetry, financial distress, and operational risk are
transmission channels contributing to the effect of economic policy uncertainty on the
sensitivity of firm investment to the stock price. This study contributes to previous research
by initially investigating the association between economic policy uncertainty and
investment sensitivity to stock price using an international sample. | en_US |
