Global uncertainty and Global Economic Policy Uncertainty: Different implications for firm investment

Author First name, Last name, Institution

Hyunduk Suh
Jin Young Yang

ORCID Identifiers

0000-0002-5515-2875

Document Type

Article

Source of Publication

Economics Letters

Publication Date

3-1-2021

Abstract

Global Economic Policy Uncertainty (EPU) and non-EPU global uncertainty measures exhibit heterogenous behavior, especially in 2010s. Using firm-level data from 36 countries, we estimate the effect of global uncertainty on corporate investment in 1997–2016. Eleven global uncertainty measures, including global EPU, are employed to encompass macro, micro, and higher-order dimensions of uncertainty. We find different effect of EPU and non-EPU global uncertainty measures on investment. Only EPU measures negatively affect investment, while non-EPU measures have positive effects, which suggests a possible first-order implication of EPU.

ISSN

0165-1765

Publisher

Elsevier

Volume

200

Disciplines

Business

Keywords

Global uncertainty, Economic Policy Uncertainty, Investment

Scopus ID

85100604812

Indexed in Scopus

yes

Open Access

no

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