State-level economic policy uncertainty (EPU) and firm financial stability: Is there any political insurance?

Ahmed W. Alam, Ashupta Farjana and Reza Houston

Economics Letters, 2023, vol. 225, issue C

Abstract: We examine the impact of state-level EPU (SEPU) on firm financial stability. SEPU erodes financial stability, regardless of firm size. Political connections moderate this effect, supporting the political insurance hypothesis. Stronger political ties reduce firm sensitivity to SEPU increases.

Keywords: State-level EPU; Firm stability; Political connection; PAC contribution; Lobbying (search for similar items in EconPapers)
JEL-codes: D72 D80 G18 G30 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:225:y:2023:i:c:s0165176523000526

DOI: 10.1016/j.econlet.2023.111027

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