Political uncertainty and investments by private and state‐owned enterprises

Neeru Chaudhry and Chris Veld

International Review of Finance, 2023, vol. 23, issue 3, 584-614

Abstract: We study corporate investments around national elections in India. Investment rates drop by a nonsignificant 2.2% for state‐owned enterprises (SOEs) in election years. The decrease is significantly larger for private firms, which record an investment drop of 7.4%. The decrease in investment for private firms is likely attributable to political uncertainty. SOEs balance political uncertainty with the desire to woo voters who want government investments. Investments in election years are perceived positively for both private firms and for SOEs. Increased investment by SOEs and reduction in investment by private firms during election years are associated with improved investment efficiency.

Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/irfi.12410

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:bla:irvfin:v:23:y:2023:i:3:p:584-614

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1369-412X

Access Statistics for this article

International Review of Finance is currently edited by Bruce D. Grundy, Naifu Chen, Ming Huang, Takao Kobayashi and Sheridan Titman

More articles in International Review of Finance from International Review of Finance Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().