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Economic policy uncertainty and sustainable financial growth: Does business strategy matter?

Tanveer Ahsan, Bakr Al-Gamrh and Sultan Sikandar Mirza

Finance Research Letters, 2022, vol. 46, issue PB

Abstract: Using a data of 975 Chinese non-financial listed firms, this study investigates the impact of firm business strategy on sustainable financial growth during economic policy uncertainty. We use index-based measures of economic policy uncertainty, sustainable financial growth and business strategy and observe that economic policy uncertainty hurts the sustainable financial growth of Chinese firms. However, we find that a defensive business strategy positively moderates the negative impact of policy uncertainty, whereas an analytical business strategy mitigates the negative impact of policy uncertainty on sustainable financial growth. The results of the study provide guidance to corporations regarding strategy formulation to effectively deal with policy uncertainties. Our results are robust to different proxies of policy uncertainty and endogeneity issues.

Keywords: Policy uncertainty; Business strategy; Sustainable financial growth; Panel data (search for similar items in EconPapers)
JEL-codes: C23 G30 G32 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:46:y:2022:i:pb:s1544612321003834

DOI: 10.1016/j.frl.2021.102381

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