Economic policy uncertainty and corporate cash holdings: the mechanism of capital expenditures

Zhao, Xiao‐Fan; Niu, Teng

doi:10.1080/16081625.2022.2054831

Cited by 6 publications

(1 citation statement)

References 51 publications

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“…Any changes brought in can impact a firm's value and investment behavior, which delays economic recovery (Baker et al 2016;Al-Thaqeb et al 2022). A rise in these uncertainties leads to increased market volatility (Baker et al 2019;Liu and Zhang 2015), poor firm performance (Feng et al 2021;Iqbal et al 2020;Trakarnsirinont et al 2023), reduced mergers and acquisitions (Sha et al 2020;Bonaime et al 2018;Lee 2018;Paudyal et al 2021), reduced flow of foreign direct investments (Avom et al 2020;Choi et al 2021;Hsieh et al 2019;Zhou et al 2021), increased cash holdings by firms (Goodell et al 2021;Hankins et al 2020;Javadi et al 2021;Zhao and Niu 2022), reduced firm innovation activities (Lou et al 2022;Cong and Howell 2018). Researchers in the past have focused on political uncertainty and its impact on investment decisions (Elmassri et al 2016;Kong et al 2022;Liu et al 2020;Amore and Minsichilli 2018;Wadhwa and Syamala 2023).…”

Section: Introductionmentioning

confidence: 99%

Political Uncertainty and Initial Public Offerings: A Literature Review

Jhawar,

Seal

2023

IJFS

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The literature on the influence of political and policy-related uncertainties on financial aspects has gained an impetus in the last two decades. This study adds to the existing literature by reviewing the impact of political uncertainty on initial public offerings (IPOs). We aim to provide a holistic overview of the past research in this domain, identify the potential research gaps, and explore them further. We performed a bibliometric analysis using VOSviewer to identify the major keywords used, the most cited papers, the authors, and the major countries where research in this domain has taken place. Our perspective on the current state of the literature has been threefold. First, considering the importance of market timing in the firm’s decision to go public, it was seen that firms had shown an unwillingness to come up with an IPO during periods of high political uncertainty. Second, political uncertainty has shown its influence in all the phases of the IPO process; however, political connections and donations mitigate this effect. Third, the research in this domain is still at a very nascent stage and is mainly restricted to China and the US. Thus, we believe that there are several areas that are yet to be explored.

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