IDEAS home Printed from https://ideas.repec.org/a/eee/intfin/v100y2025ics1042443125000265.html
   My bibliography  Save this article

Spillover effects of US economic policy uncertainty on emerging markets: Evidence from transnational supply chains

Author

Listed:
  • Gao, Jieying
  • Qin, Qi
  • Zhou, Shengjie

Abstract

This study provides empirical evidence on the role of transnational supply chains in the cross-border transmission of US economic policy uncertainty (EPU) to emerging markets. Using data from 22 emerging economies between 2003 and 2022, we find that US EPU significantly increases the risk for firms connected to US supply chains, compared to those operating solely in local markets. The key mechanisms driving this risk transmission are the capital chain (measured by trade credit) and the product chain (reflected in inventory turnover). Cross-sectional analyses show that firms in politically sensitive industries, with constrained financing, and those with higher participation in transnational supply chains experience a more pronounced impact from US EPU. We also observe adverse effects on other aspects of firm performance, including operating income and return on assets. Together these findings highlight the need for emerging markets to actively manage spillover risks arising from US EPU.

Suggested Citation

  • Gao, Jieying & Qin, Qi & Zhou, Shengjie, 2025. "Spillover effects of US economic policy uncertainty on emerging markets: Evidence from transnational supply chains," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 100(C).
    • Handle: RePEc:eee:intfin:v:100:y:2025:i:c:s1042443125000265
    DOI: 10.1016/j.intfin.2025.102136
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1042443125000265
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.intfin.2025.102136?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Economic policy uncertainty; Transnational supply chain; Firm risk; Cross-border spillover effect; Trade credit;
    All these keywords.

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:intfin:v:100:y:2025:i:c:s1042443125000265. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/intfin .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.