Economic policy uncertainty exposure and stock price bubbles: Evidence from China

Feiyang Cheng, Chunfeng Wang, Xin Cui, Ji Wu and Feng He

International Review of Financial Analysis, 2021, vol. 78, issue C

Abstract: We explore the impact of economic policy uncertainty exposure (hereafter, EPU exposure) on stock price bubbles. We find that there exists a significantly positive relationship between EPU exposure and stock price bubbles. This result is still significant after a series of robustness checks. Moreover, the relationship between EPU exposure and bubbles is due to retail investors' speculative trading behavior. In addition, optimistic aggregate states and firms with higher information uncertainty characteristics strengthen the EPU exposure effects. Overall, we provide unique evidence regarding the impact of uncertainty on stock prices.

Keywords: Economic policy uncertainty exposure; Stock price bubbles; Retail trades; China (search for similar items in EconPapers)
JEL-codes: G12 G18 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1057521921002817
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:78:y:2021:i:c:s1057521921002817

DOI: 10.1016/j.irfa.2021.101961

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu ().