Economic policy uncertainty and firm performance

Umer Iqbal*, Christopher Gan, Muhammad Nadeem

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

120 Citations (Scopus)

Abstract

This study examines the relationship between economic policy uncertainty (EPU) and firm performance of the US-listed non-financial firms. Using four proxies of firm performance such as Return on Assets, Return on Equity, Net Profit Margin and Tobin’s Q, we find that the effect of EPU on firm performance is significant and negative on all four proxies. System-GMM estimation is used to address the problem of endogeneity because unreported results show the presence of heteroscedasticity and autocorrelation in OLS and fixed effect estimations.

Original languageEnglish
Pages (from-to)765-770
Number of pages6
JournalApplied Economics Letters
Volume27
Issue number10
Early online date12 Aug 2019
DOIs
Publication statusPublished - 6 Jun 2020
Externally publishedYes

Keywords

  • Economic policy uncertainty
  • financial constraints
  • firm performance
  • system-GMM

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