Economic Policy Uncertainty and Corporate Investment - Cash Sensitivity

DOI

10.2991/assehr.k.211209.443How to use a DOI?

Keywords

economic policy uncertainty; Investment cash flow sensitivity

Abstract

This paper explores the relationship between economic policy uncertainty (EPU) and corporate investment cash sensitivity. We find that economic policy uncertainty has a significant impact on the investment-cash flow sensitivity of firms. Moreover, these results were still robust after a series of robustness tests and endogeneity treatments. More importantly, this paper finds that EPU impacts firms’ investment-cash flow sensitivity mainly by affecting financing constraints (information disclosure, operational risk). Finally, compared with large-scale enterprises, EPU has a more significant impact on the investment-cash flow sensitivity of small-scale enterprises. Compared with enterprises with a high state-owned share ratio, EPU significantly impacts enterprises with a low state-owned share ratio. Moreover, we also find that institutional investors have no significant mitigating effect on the sensitivity of investment cash flow of enterprises impacted by economic policy uncertainties. The data we used was from the Wind data system, and the fixed effect panel was used, and the measurement method was LSDV.

Copyright

© 2021 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Jiezhang Huang
AU  - Jiasen Zeng
AU  - Xujuan Zhan
PY  - 2021
DA  - 2021/12/15
TI  - Economic Policy Uncertainty and Corporate Investment - Cash Sensitivity
BT  - Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
PB  - Atlantis Press
SP  - 2721
EP  - 2728
SN  - 2352-5428
UR  - https://doi.org/10.2991/assehr.k.211209.443
DO  - 10.2991/assehr.k.211209.443
ID  - Huang2021
ER  -