The effect of economic policy uncertainty on bank valuations

He, Zelong; Niu, Jijun

doi:10.1080/13504851.2017.1321832

Cited by 65 publications

(36 citation statements)

References 17 publications

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“…This is a new discovery of this study. Previous studies about the influences of EPU on economic entities are mainly negative [14,23,26]. This conclusion is in good agreement with the results of other existing studies on EPU.…”

Section: Discussionsupporting

confidence: 91%

“…EPU increases the cash holdings of enterprises [19,20], lowers the leverage ratio of enterprises [21], relieves the dynamic regulation of the capital structure of enterprises [22], and inhibits the investment behavior of enterprises [23,24]. For financial institutions, EPU decreases bank credit [25][26][27]. When EPU increases, investment funds will increase the proportion of liquid assets and decrease the proportion of shareholding for preventive motivation and market timing motivation [28].…”

Section: Economic Policy Uncertainty and Resident Happinessmentioning

confidence: 99%

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Assessment of Resident Happiness under Uncertainty of Economic Policies: Empirical Evidences from China

et al. 2020

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The main aim of sustainable development is to increase the quality of life and resident happiness as the latter is one of the most important indicators for the assessment of quality of life. However, due to the uncertainty of economic policies, it will not only have a direct impact on resident well-being but may also indirectly affect resident well-being through specific channels. The economic policies are aimed at the achievement of sustainable development, therefore it is very important to investigate the influences of the uncertainty of economic policies on resident happiness. This allows to assess the sustainability of policies in terms of their inputs to the quality of life. The direct impact of economic policy uncertainty on resident well-being and the mediating effects of household asset allocation and the expectation on the above influencing relationship were analyzed based on the uncertainty index of China’s economic policies and households database of China Family Panel Studies (CFPS) during the period 2010–2018, so as to clarify the complete path of economic policy uncertainty affecting resident happiness. Results show that the uncertainty of economic policy significantly reduces resident happiness. In the context of the uncertainty of economic policies, families can relieve such negative impacts as an increasing proportion of financial assets in their total assets. However, decreases in asset shares for household consumer goods and future expectation obviously lower resident happiness. The research conclusions provide important input in research on the influences of the uncertainty of economic policy on the quality of life and offer new evidences for the development of “happiness economics”.

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Section: Discussionsupporting

confidence: 91%

Section: Economic Policy Uncertainty and Resident Happinessmentioning

confidence: 99%

Assessment of Resident Happiness under Uncertainty of Economic Policies: Empirical Evidences from China

et al. 2020

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“…Chen et al, 2020;Duca and Saving, 2018). Indeed, most of existing studies address the impact of EPU on economic activity (Nyamela et al, 2019;Sahinoz and Cosar, 2018), financial volatility (Mei et al, 2018;Tiwari et al, 2019), bank valuation (He and Niu, 2018) or firm performance (Iqbal et al, 2019;Wu et al, 2020). Consequently, we add to the set of analyses investigating the drivers of EPU, with a focus on the officially reported coronavirus numbers.…”

mentioning

confidence: 99%

Do COVID-19 and Crude Oil Prices Drive the US Economic Policy Uncertainty?

Albulescu

2020

SSRN Journal

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This paper investigates the effect of the novel coronavirus and crude oil prices on the United States (US) economic policy uncertainty (EPU). Using daily data for the period January 21 -March 13, 2020, our Autoregressive Distributed Lag (ARDL) model shows that the new infection cases reported at global level, and the death ratio, have no significant effect on the US EPU, whereas the oil price negative dynamics leads to increased uncertainty. However, analyzing the situation outside China, we discover that both new case announcements and the COVID-19 associated death ratio have a positive influence on the US EPU.

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“…For example, before and after the crisis, investors in large, systemic bank holding companies penalized leverage although it is temporary (Bertsatos et al, 2017). He & Niu (2017) examined the impact of economic policy uncertainty [EPU] on valuation of banks. Using Tobin's Q to measure valuations, the study sampled quarterly observations on publicly traded banks in the US from first quarter of 1990 to fourth quarter of 1995.…”

Section: Page50mentioning

confidence: 99%

“…Using Tobin's Q to measure valuations, the study sampled quarterly observations on publicly traded banks in the US from first quarter of 1990 to fourth quarter of 1995. The study showed that EPU negatively impacts bank valuation, and the negative effect is more distinct on banks with high ratio of loans to total assets (He & Niu, 2017). Song (2017) studied how accounting regulations in banking affect bank valuation and volatility.…”

Section: Page50mentioning

confidence: 99%

A Critical Assessment on Bank Valuation in Existing Literature in the Last Decade

Dayag

Trinidad²

2019

IJRBS

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This paper examines vast literature covering bank valuation practices, frameworks, and various factors that impact bank valuation. Researches on bank valuation covering the last 10 [ten] years were made, and there appear to have a certain level of conservatism on how to measure value of banks. This could be due to the recent global financial crisis, and what is common among the studies was, discourage banks from taking on additional risks. Different factors impact bank valuation and it depends on country and economic circumstances, including banking regulations and internal governance. Various bank valuation frameworks were also added from extensive researches gathered. The literature review also identified nine [9] variables that impact bank valuation, seven [7] of which are bank-specific attributes, one [1] is regulation related, and one [1] is macroeconomic. Future researches may use these variables and validate significance using statistical methods.

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The effect of economic policy uncertainty on bank valuations

Cited by 65 publications

References 17 publications

Assessment of Resident Happiness under Uncertainty of Economic Policies: Empirical Evidences from China

Assessment of Resident Happiness under Uncertainty of Economic Policies: Empirical Evidences from China

Do COVID-19 and Crude Oil Prices Drive the US Economic Policy Uncertainty?

A Critical Assessment on Bank Valuation in Existing Literature in the Last Decade

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