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Economic policy uncertainty (EPU) has huge impact and harm on real economy, so the economic logic and other economic effects behind this must be further studied. By constructing the “China Economic Policy Uncertainty Index” to capture the degree of EPU faced by Chinese companies, the authors empirically test whether and how EPU affects the level of executives' perquisite consumption.

This study investigates the relationship between EPU and executive perquisite consumption based on a sample of 3,185 publicly listed firms in China. To examine the relationship between EPU and executives' perquisite consumption, a mixed least squares method was used for regression. To alleviate the problem of missing variables that do not change over time and control the influence of unobservable individual heterogeneity at the firm level, the firm fixed effects model is used for regression.

The study finds that EPU is positively associated with executive perquisite consumption. This positive association is stronger for firms with smaller size, lower management shareholding and higher levels of separation of ownership and control. Effective external governance (i.e., analyst coverage, media coverage, auditor and market competition) can mitigate the relationship between EPU and executive perquisite consumption. Further analysis reveals that EPU increases executive perquisite consumption by holding more cash and decreasing firm risk taking. EPU hurts market value of firms by boosting executive perquisite consumption and tunneling.

In an environment with high EPU, the board of directors should reduce managers' compensation performance sensitivity to ease the agency conflict caused by uncertainty. Firms should improve their governance mechanisms and standard and pay attention to their environmental changes. Policymakers should pay attention to maintaining the continuity and predictability of policies, stabilizing the economic policy expectations of market entities and avoiding frequent changes in policies that can harm economic and firm value. The regulatory authorities should actively guide listed companies to increase active information disclosure during periods of high policy uncertainty.

This study contributes to the research on corporate governance by showing how EPU influences executives' behaviors. The authors advance relative studies by showing that this uncertainty embedded in a firm's external environments influences executive perquisite consumption. This study also contributes to the literature on how internal and external governances influence corporate behavior during uncertainty. These findings extend this line of research by suggesting that effective external governance is an attribute that can alleviate the effect of uncertainty on managers' opportunistic behaviors.

The purpose of this paper is twofold. First, the study examines the prolonged effect of policy-related economic uncertainty on hotel operating performance, particularly the room demand (occupancy). Second, the study attempts to explain why occupancy drops when the perceived economic uncertainty is high by studying the mediating effect of consumer sentiment in the relationship between economic policy uncertainty and hotel demand.

This quantitative study uses secondary data – US economic policy uncertainty (EPU) index, University of Michigan's index of consumer sentiment (ICS), and property-level hotel operating data from three states of the US – California, Florida and New York. Data were analyzed using random effect regression and structural equation modeling. Robustness tests were conducted to enhance the reliability of the research findings.

Random-effects regression analysis reveals that policy-related economic uncertainty has a negative and lead-lag effect on hotel occupancy, average daily rate and revenue per available room (RevPAR). Structural equation modeling results show that the relationship between economic policy uncertainty and hotel occupancy is significantly mediated by consumer sentiment. Robustness test results support the findings from the main analysis.

This study offers valuable implications for the hotel professionals in regard to anticipating the economic impact of policy-related uncertainty on hotel industry and understanding how consumer sentiment affects demand at such crises times. Moreover, the study suggests potential course of actions to deal with declining room demand at times of uncertainty.

This empirical study explores how economic policy uncertainty affects hotel performance at the property level and explains the mediating effect of consumer sentiment on hotel room demand. The study provides a first-hand evidence of how consumer sentiment relates to the perception of economic uncertainty and leads to decline in consumer demand. In that regard, findings of the study have valuable implications for hospitality industry practitioners and relevant policymakers.

This study examines the impact of economic policy uncertainty (EPU) on investment decision-making of start-up firms in Japan. While existing literature suggests firms generally retrench investment under EPU, the authors argue that start-ups’ investment behaviours are likely different given the fact that start-ups always have to compete for survival.

The authors investigate the impact of general economic policy and policy-specific uncertainty, including monetary policy, fiscal policy, trade policy and exchange rate policy uncertainty, on corporate investment of start-up firms using multiple fixed-effect regression. A wide range of robustness and endogeneity tests are conducted to ensure the validity and soundness of the empirical findings.

The authors document a positive effect of EPU on start-up investment, to suggesting that the investment behaviour of start-ups is backed by venture capital distinct from that of mature firms. The results show that start-ups are more vulnerable during the changes in trade and exchange rate policies; uncertainties in monetary and fiscal policies do not restrain firms' investment. However, the effect varies in the cross-sections. Financial constraints have a moderating effect on the relation-ship between EPU on start-up investment. Institutional investors have an incremental effect on the positive relationship between EPU and start-up investment by encouraging risky investments.

This is the first study to investigate how start-up investment is influenced by EPU, thus providing a new understanding of the investment behaviour of start-up firms during uncertainty. Further investigation sheds light on the roles of institutional and managerial ownership in this newfound relationship.

Introduction: Uncertainty plays an important role on economic stability and macroeconomic variables. Economic agents postpone decisions about investment and consumption in periods in which uncertainty is high. This situation affects economic growth negatively. Recently, uncertainty has focused on policy uncertainty. At this point, economic policy uncertainty (EPU) comes to the forefront. EPU is defined as conception that economic agents do not forecast consequences of economic policies adopted by policy makers and future economic policies. In terms of developing countries, statements presented by policy makers in the United States especially may appear as a source of uncertainty in developing economies.

Aim: Therefore, the aim of this study is to analyze the effects of US EPU on macroeconomic variables for Turkey and Brazil, Russia, India, China and South Africa for periods in which global risk perception is low and high.

Method: The authors used monthly data from January 1998 to December 2018. For this purpose, the authors used Threshold VAR. VIX index takes in consideration as global risk perception. The authors used US EPU index proposed by Baker’s vd. (2016) in order to measure EPU in the United States. Besides, the authors used macroeconomic variables such as industrial production index, inflation and exchange rate.

Findings: As is seen from the results of the analysis, for Turkey’s economy the macroeconomic variables significantly and strongly respond to the changes in the EPU index during the periods in which global risk perception is low; nonetheless, the so-called responses weaken due to the adopted policy of “wait and watch” by investors during the periods in which global risk perception is high.

Apart from providing theoretical clarity, the present research aims to validate empirically that the EPU will be adversely affecting these key macroeconomic variables and that managing EPU matters for economic policymaking in Nigeria.

A dynamic autoregressive distributed lag regression model is employed to analyse the relationship from 1990 to 2020. Based on the theory of multiplier effect, the analysis could examine the positive and negative changes in policy uncertainty, as well as the reliability in macroeconomic activities such as unemployment, infrastructure development and foreign direct investment inflows.

The findings revealed EPU is cointegrated with the key economic variables in focus. Further, the negative impact of EPU on corporate investment in FDI and positive impact of EPU on unemployment confirm for both short and long-run. However, the impact of EPU on government investment in infrastructure development is found to be positive which does not confirm the expected hypothesis.

Dynamic relationship between policy uncertainty and macroeconomic activities in Nigeria seems to exist. Taking risky decisions has impact and causing a high unemployment rate, poor infrastructural development and lower foreign direct investment inflows in the country.

Policy uncertainty in Nigeria is determining. Despite that, very little research found that rising uncertainty issues may significantly affect unemployment, investment in infrastructure and foreign direct investment inflows adversely. Therefore, policy uncertainty is an open space for economic activities to thrive in Nigeria, especially unemployment.

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-08-2022-0555

This chapter examines the impact of economic policy uncertainty (EPU) on bank profitability, using a sample of US banks from 2001 to 2016. We find a robust negative relationship between the aggregate level of policy uncertainty and bank profitability. The channel analysis shows that policy uncertainty can significantly reduce loan growth and increase the nonperforming loan ratio. More importantly, we find critical evidence that bank capital can improve the impact of policy uncertainty on the bank's economic performance and operation. Overall, this chapter has an important policy implication: policymakers can reduce the adverse effect of policy uncertainty on the banking industry through measures to stabilize bank capital adequacy.

To investigate the role of domestic and foreign economic policy uncertainty (EPU) in driving the corporate bond yields in emerging markets.

The study utilizes monthly data from January 2008 to June 2023 from the selected emerging economies. The data analysis is conducted using univariate, bivariate and multivariate statistical techniques. The study includes bond market liquidity and global volatility (VIX) as control variables.

Domestic EPU has a significant role in driving corporate bond yields in these markets. The study finds weak evidence to support the role of the USA EPU in influencing corporate bond yields in emerging economies. Domestic EPU holds more weight and influence than the EPU originating from the United States of America.

The findings provide useful insights to policymakers about the potential impact of policy uncertainty on corporate bond yields and enable them to make informed decisions regarding economic policies that maintains financial stability. Understanding the relationship between EPU and corporate bond yields enables investors to optimize their investment decisions in emerging market economies, opens the scope for further research on the interaction between EPU and volatility and other attributes of fixed income markets.

Focuses specifically on the emerging market economies in Asia, providing an in-depth analysis of the dynamics and challenges faced by these countries, Explores the influence of both domestic and the USA EPU on corporate bond yields in emerging markets, offering valuable insights into the transmission channels and impact of EPU from various sources.

This research intends to investigate the impact of economic policy uncertainty (EPU) on the firm's leverage and its adjustment speed.

This study applies dynamic panel data modeling by using a partial adjustment model. The study is based on secondary data of the non-financial firms that are listed on the Pakistan stock exchange. For the analysis purpose, the study applies the generalized method of moments (GMM) estimation technique and uses a newly developed text-based measure of economic policy uncertainty.

The results show the negative impact of EPU on leverage decisions but a positive impact of EPU on leverage speed of adjustment for both, short-run and long-run economic policy shocks. Additional analysis reveals that the negative influence of long-run policy shocks on leverage decisions is moderated through profitability, and the negative influence of short-run policy shocks on leverage is moderated through firm size, tangibility and available growth prospects. However, the significant positive impact of EPU on the leverage speed of adjustment in both short and long-term policy shocks indicates that the speed of adjustment for these firms is not affected by policy shocks.

This research contributes to the existing literature on capital structure dynamics,by investigating the impact of EPU on firm financing decisions and estimating the adjustment speed of capital structure in a developing market context. The study also extends the existing literature by applying the concept of long-run and short-run economic policy uncertainty in the capital structure dynamic framework. Additionally, the new news-based measure of EPU is used. Moreover, it also looks into the COVID-19 effect on the relationship.

This study aims to examine the impact of economic policy uncertainty and bank competition on the financial stability of the Chinese banking industry. This study answers two fundamental questions. First, does economic policy uncertainty (EPU) affects the financial stability of banks in China? Second, does competition affect the financial stability of the Chinese banking sector?

The sample includes all commercial banks to provide a full picture of the Chinese banking sector. This study covers the time between 2011 and 2019. The sample period captures different EPU spikes and key policy changes. This study used different econometric methodologies such as the generalized method of moments and the fixed effect and ordinary least square estimation models. Furthermore, this study used the Instrumental Variable model to solve endogeneity, autocorrelation and unobserved heterogeneity concerns. Besides, alternative EPU and financial stability measures were used. Moreover, this study reestimates the model after dropping the big five state-owned banks.

This study found that both EPU and competition reduce financial stability. This implies that EPU has a negative impact on financial stability. This shows that uncertainty distorts resource allocation efficiency and creates confusion, leading to financial instability in the banking sector. Besides, this study found that competition negatively affects financial stability. This result implies that high competition pushes banks toward riskier activities that ultimately lead to increased financial instability.

This study is the first of its kind that examines the impact of EPU and competition on the financial stability of the Chinese banking sector. This study conducted several robustness tests such as the instrumental variable model, alternative measurement and sample construction methods. This study brings policy implications and lessons for the banking sector.