Policy Uncertainty and Corporate Investment:An Empirical Study on Strategic and Emerging Industry

Abstract

Abstract:

Based on the series of uncertainty anticipations triggered by strategic and emerging industrial policy about how the policy would be set, how it would be put into effect, and how the impacts would be, and taking the strategic and emerging industry related corporations as samples, the paper does an empirical study on how policy uncertainty affects the investment behavior of the related corporations from province level and corporate level. The results show that policy uncertainty intensifies the anticipation of financial constraints faced by the corporation, and changes the corporate business environment, which all reduce corporate investment significantly. Further, the magnitude of the negative effects varies with different magnitude of financial constraints and marketization. The higher the anticipation of financial constraints and the inferior of the marketization, the stronger the negative effects are.

Key words: policy uncertainty, industrial policy, corporate investment

Jin Guanghui, Liu Zhiyuan, Hua Guiru. Policy Uncertainty and Corporate Investment:An Empirical Study on Strategic and Emerging Industry[J]. , 2016, 28(9): 3-16.

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