Economic Policy Uncertainty, Financial Leverage, and Corporate Investment: Evidence from U.S. Firms-Reference-Cited by-同舟云学术

Economic Policy Uncertainty, Financial Leverage, and Corporate Investment: Evidence from U.S. Firms

Published:2023-01-23 Issue:2 Volume:11 Page:37
ISSN:2227-7099
Container-title:Economies
language:en
Short-container-title:Economies

Author:

Almustafa Hamza¹^ORCID,Jabbouri Imad²^ORCID,Kijkasiwat Ploypailin³^ORCID

Affiliation:

1. Department of Banking and Financial Sciences, Faculty of Economics and Administrative Sciences, The Hashemite University, Zarqa 13133, Jordan

2. School of Business Administration, Al Akhawayn University, Ifrane P.O. Box 104, Morocco

3. The Faculty of Business Administration and Accountancy, Khon Kaen University, Khon Kaen 40002, Thailand

Abstract

This paper examines the effect of economic policy uncertainty (EPU) on firm-level investment and corporate financial leverage. The panel data of 1072 firms traded on the New York Stock Exchange (NYSE), New York Stock Exchange Market (NYSE MKT) (formerly known as American Stock Exchange—AMEX), or NASDAQ over the period 2012–2021 was analyzed using the fixed-effect model. The empirical results show that the financial leverage of a firm is negatively affected by EPU. Additionally, EPU depresses firms’ investment decisions and debt financing. Our results are robust when alternative measures of our main variables are used.

Publisher

MDPI AG

Subject

Economics, Econometrics and Finance (miscellaneous),Development

Link

https://www.mdpi.com/2227-7099/11/2/37/pdf

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