This study investigates the influence of economic policy uncertainty on total factor productivity (TFP) of enterprises. We find that economic policy uncertainty is significantly and negatively ...related to the TFP growth of enterprises in China. By distinguishing the nature of enterprise property rights and the scale of enterprises, we find that the reduction of the TFP growth of enterprises is more significant in non-state-owned enterprises and large-scale enterprises. Our analysis shows that economic policy uncertainty will reduce the TFP growth of enterprises by aggravating financial mismatch.
•Economic policy uncertainty hinders the TFP growth of enterprises.•The reduction of enterprises TFP growth is more significant in non-state-owned enterprises and large-scale enterprises.•Economic policy uncertainty will reduce the TFP growth of enterprises by aggravating financial mismatch.
•This paper empirically tests the theories concerning bank lending, economic policy uncertainty (EPU), and national prudential regulations.•We find that EPU significantly hinders the growth of bank ...credit, but the effect varies across banks.•The negative effect of EPU on loan growth is greater for larger-sized banks and riskier banks, while weaker for more liquid banks and more diversified banks.•The negative impact of EPU on bank lending is alleviated by both macroprudential and microprudential policies.
This paper empirically tests the theories concerning bank lending, economic policy uncertainty (EPU), and national prudential regulations. Using bank level data in 19 major economies, we find that EPU significantly hinders the growth of bank credit, but the effect varies across banks. In particular, the negative effect of EPU on loan growth is greater for larger-sized banks and riskier banks, while weaker for more liquid banks and more diversified banks. In addition, the impact of EPU on bank lending depends critically on national prudential regulations, such that the negative effect appears to be alleviated by both macroprudential and microprudential policies.
We examine the effect of aggregate economic policy uncertainty (EPU; Baker et al., 2016) on firms’ asymmetric cost reaction to sales changes (cost stickiness). We find that cost stickiness decreases ...with EPU in the United States (US) after we control for the positive relationship between cost stickiness and election years (Lee et al., 2020). This result is consistent with managers revising down their expectations of future demand and adjustment costs during high-EPU years, causing them to drastically cut operating costs. The stickiness of cost of goods sold and number of employees are particularly sensitive to EPU. The duration of EPU appears to be an important factor in explaining this negative relationship. EPU directly affects firms that depend on government spending and belong to highly regulated industries. EPU also indirectly affect all firms via its impacts on the aggregate economy and funding costs. We use an international sample to confirm the result and to explore the institutional factors that moderate the effect of EPU on cost stickiness.
Investor uncertainty about firm value drives investors’ information collection and trading activities, as well as managers’ disclosure choices. This study examines an important source of uncertainty ...that likely cannot be influenced by most managers and investors: uncertainty about government economic policy. We find that this uncertainty is associated with increased bid-ask spreads and decreased stock price reactions to earnings surprises. Managers respond to this uncertainty by increasing their voluntary disclosures, but these disclosures only partly mitigate the bid-ask spread increase. We conclude that government economic policy uncertainty is an important component of firms’ information environments and managers’ voluntary disclosure decisions.
This article aims to examine the link between European economic policy uncertainty (EPU) and tourism activities in Portugal, Ireland, Italy, Greece, and Spain using wavelet transform context ...structures. This innovative technique allows the decomposition of time-series at different time frequencies. In this work, we used continuous wavelets, wavelet coherency, and wavelet phase difference based on Granger causality analysis to investigate the relationship between European EPU and tourism using the annual data from 1995 to 2015. The results indicate that there is a unidirectional causal influence of European EPU on international tourism receipts (ITR) in the short run and a bidirectional causal influence of European EPU on ITR in European countries in the long run. Accordingly, it can be recommended that the government needs to increase and promote tourism demand and to further provide and nurture the expansion of tourism supply.
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•Long-run effect of policy uncertainty and institutional quality on green growth.•Distributional heterogeneity using Panel Quantile Regression.•Economic policy uncertainty has ...negative impact on green growth.•Institutional quality and renewable energy consumption increases the green growth.•Trade openness has positive impact on green growth.
Environmental degradation is one of the most debatable topics at international forums and it is considered a prime concern for the entire world. Therefore, researchers and policymakers have turned their attention from conventional economic growth to green growth. Although the existing literature has discussed several determinants of green growth, the impact of economic policy uncertainty (EPU), renewable energy consumption (RENE), and institutional quality (IQ) on green growth (GGDP) is relatively unexplored. Hence, this study is the earliest attempt to investigate the impact of EPU, IQ, and RENE on GGDP for emerging seven (E-7) countries from 1996 to 2019. In doing so, we apply panel quantile regression (PQR). The empirical findings delineate that EPU has a negative impact on GGDP, whereas IQ and RENE enhance the GGDP in E-7 countries. Based on the outcomes, this study suggests policy implications for achieving targets of the SDG 07, SDG 08, SDG 13, and SDG 16. The governments of these countries can achieve higher GGDP by ensuring political stability and reliable macroeconomic policies and through making such flexible policies that can easily control or address unpredictable future economic issues.
We construct a new monthly index of Economic Policy Uncertainty for China in 2000–2018 based on Chinese newspapers. Different from the existing index, ours uses information from multiple local ...newspapers, and foreshadows declines in equity price, employment and output. Media censorship does not seem to have qualitative impact to our index. Moreover, we develop a daily uncertainty index and several policy-specific uncertainty indices for public use.
•A new monthly index of Economic Policy Uncertainty for China in 2000–2018 is constructed.•Our index uses information from multiple local newspapers.•Our index foreshadows declines in equity price, employment and output.•Media censorship does not seem to have qualitative impact to our index.•Moreover, we develop a daily index and several policy-specific indices.
This research unveils the effect of economic policy uncertainty on renewable energy in G7 while technological innovation is used as a control variable by employing a quantile on quantile approach. ...The outcome explores the negative effect of economic policy uncertainty on renewable energy across all quantiles. Moreover, the relationship is detected mostly in upper quantiles and the coefficients reveal varying effects. Furthermore, the negative impact of economic policy uncertainty on renewable energy and vice versa is recorded in Canada, France, Germany, the UK, and the U.S. On the other hand, Italy and Japan record negative effects of economic policy uncertainty on renewable energy in the medium to upper quantiles, and a positive impact is observed from renewable energy to economic policy uncertainty in higher to lower quantiles. The positive impact of technological innovation on renewable energy is detected in the medium quantiles for all the G7 countries. Our results are in line with the general equilibrium model (GEM) that explains the negative influence of economic policy uncertainty on renewable energy development and vice versa. The government policy and regulatory framework consistency are paramount in renewable development.
Across the globe, many countries have planned to increase renewable energy production capacity by support of financial development, technological innovations and economic policies. Since, using more ...traditional energy resources produces a large quantity of carbon emissions leading to global warming and climate change. To maintain normal climate and reduce global warming is only possible by shifting the use of traditional energy resources to renewable energy resources. All countries have to give more priority for development of renewable energy which will ensure sustainability and environmental quality. Therefore, this study examines the impact of economic policy uncertainty and financial development on renewable energy consumption by considering role of economic globalization in renewable energy demand function in top renewable energy consuming countries, spanning the period of 2003M01-2020M12. We applied panel econometric approaches which handle cross-section dependency, endogeneity and heterogeneity for empirical analysis. The results for long-run and short-run elasticities show that economic growth, financial development and economic globalization have a significant and positive impact on renewable energy consumption. Economic policy uncertainty impedes renewable energy production capacity. Overall, the results suggest that economic globalization, financial development and economic growth significantly increase renewable energy consumption. These results offer new insights for policy-makers to advancement of renewable energy sources by allocation of more capital and transfer of technology for the improvement of environmental quality in top renewable energy consumers.
•We examine the impact of economic globalization on renewable energy consumption.•We employ CS-ARDL on panel data from 2003M01–2020M12.•EG, FD and EG have significant and positive impact on renewable energy consumption.•EPU significantly reduces renewable energy consumption.
The link between policy-related economic uncertainty and the environment has a new and developing literature. In this study, the effects of economic policy uncertainty, energy consumption and ...economic growth on pollution in G7 countries are investigated by using methods of moments quantile regression over the perod of 1995–2018. According to the long run coefficient estimation results, in the model in which the fossil fuel energy consumption variable is used as an energy consumption indicator, economic policy uncertainty has a reducing effect on emissions at all quantile levels. Although this negative effect becomes more pronounced as the quantile level increases, it is statistically insignificant at the 0.90 quantile level. In the model that includes fossil fuel energy consumption, the coefficient of economic policy uncertainty variable is negative in all quantiles and is significant only at the 0.30 and 0.40 quantile levels. In addition, while a U-shaped relationship is detected between economic growth and emissions in these countries, the destroying effect of fossil fuel energy on environmental quality is confirmed in all quantiles. Thus, it should be a priority to support the developments in growth performance with environmental regulations, encourage energy-saving and energy-efficient practices as well as to establish the legal infrastructure.
•Economic policy uncertainty has a reducing effect on emissions at all quantile levels.•The coefficient of economic policy uncertainty variable is negative in all quantiles.•U-shaped relationship is detected between economic growth and emissions in these countries.•The destroying effect of fossil fuel energy on environmental quality is confirmed in all quantiles.•It should be a priority to support the developments in growth performance with environmental regulations.
