Understanding sustainable growth in the face of economic policy uncertainties

Xiang Tiange (), Sultan Sikandar Mirza (), Chengwei Zhang () and ChengMing Huang ()
Additional contact information
Xiang Tiange: University of Waikato Joint Institute, Hangzhou City University
Sultan Sikandar Mirza: University of Waikato
Chengwei Zhang: University of Waikato Joint Institute, Hangzhou City University
ChengMing Huang: University of Waikato Joint Institute, Hangzhou City University

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2025, vol. 27, issue 8, No 41, 18899-18932

Abstract: Abstract This paper investigates the impact of economic policy uncertainty (EPU) in China, measured by a news-based index, on the sustainable growth of 2771 Chinese non-financial A-share firms (including 1674 SMEs and 1097 non-SMEs) from 2010 to 2022. We also analyze how green business practices moderate the impact of EPU on firms' sustainable growth. After implying various econometric models, this study finds that EPU has a significant negative effect on the sustainable growth of Chinese firms, which is more pronounced among non-SMEs. Heterogeneity analysis reveals that the negative impact of EPU on CSG is more pronounced in big firms, highly leveraged firms, firms with low liquidity and low financialization in China. We further reveal that this negative impact of EPU stems from trade policy uncertainties. Furthermore, findings reveal that green business activities positively moderate the association between EPU and sustainable growth, and that this moderating impact is more pronounced among SMEs. These findings are consistent with various robustness approaches. This paper provides useful insights for enterprises to improve their sustainable growth in the context of economic policy uncertainties by adjusting their number of employees, board of directors, average age of staffs, financialization level and debt flexibility.

Keywords: Economic policy uncertainty (EPU); Sustainable growth; Green business practices; A-share non-financial firms; Chinese SMEs (search for similar items in EconPapers)
JEL-codes: G30 M14 Q53 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10668-024-04651-0 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:endesu:v:27:y:2025:i:8:d:10.1007_s10668-024-04651-0

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/10668

DOI: 10.1007/s10668-024-04651-0

Access Statistics for this article

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development is currently edited by Luc Hens

More articles in Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().