IDEAS home Printed from https://ideas.repec.org/a/taf/apeclt/v30y2023i19p2732-2742.html
   My bibliography  Save this article

Economic policy uncertainty, corporate diversification, and corporate investment

Author

Listed:
  • Zahid Jumah
  • Zahid Irshad Younas
  • Mamdouh Abdulaziz Saleh Al-Faryan

Abstract

This study explores the moderating role of corporate diversification between economic policy uncertainty (EPU) and corporate investment relationship. Using firm-level panel data of US firms over the period 2000–2020, we show that corporate diversification positively moderates the negative impact of EPU on corporate investment by reducing financial constraints. The analysis indicates that diversification mitigates the adverse impact of EPU on US firms’ investment. Furthermore, our results are robust to alternative proxies, subsample tests, selection bias, and endogeneity concerns. The findings are helpful from a managerial perspective, suggesting that diversification alleviates financial constraints, enabling firms to-- mitigate the negative impact of EPU on investment.

Suggested Citation

  • Zahid Jumah & Zahid Irshad Younas & Mamdouh Abdulaziz Saleh Al-Faryan, 2023. "Economic policy uncertainty, corporate diversification, and corporate investment," Applied Economics Letters, Taylor & Francis Journals, vol. 30(19), pages 2732-2742, November.
    • Handle: RePEc:taf:apeclt:v:30:y:2023:i:19:p:2732-2742
    DOI: 10.1080/13504851.2022.2106028
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13504851.2022.2106028
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13504851.2022.2106028?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.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhang, Cong & Farooq, Umar & Jamali, Dima & Alam, Mohammad Mahtab, 2024. "The role of ESG performance in the nexus between economic policy uncertainty and corporate investment," Research in International Business and Finance, Elsevier, vol. 70(PB).

    More about this item

    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:taf:apeclt:v:30:y:2023:i:19:p:2732-2742. 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEL20 .

    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.