Global economic policy uncertainty and corporate investment - Empirical evidence of non-financial companies listed in HOSE

Abstract

The Economic Policy Uncertainty Index is an important indicator and influences the corporate financial and investment behavior of companies. In this study, the corporate investment behavior from 2018 to 2020 of 354 non-financial firms listed in Ho Chi Minh Stock Exchange is tested to show how businesses respond to changes in the Global EPU index as well the affection of Leverage, Cash flow, Tobin’s Q, Size, and Sales Growth to investment in enterprises. Besides, the research also examined the difference in terms of corporate investment between state-owned companies and the non-state-owned companies. The data was hand collected and analyzed by Pooled OLS Regression and Fixed-Effect Model through STATA software to determine the relationship between corporate investment and explanatory variables. The results of the study indicate that the correlation between corporate investment and the global EPU index is inversely proportional. Besides, this study also proves that the increase of leverage ratio is a factor that helps business investment growth.