Economic policy uncertainty and business performance: The moderating role of service transformation

Ling Ou, Zhibin Zhang, Renyu Li and Zhuo Chen

International Review of Economics & Finance, 2023, vol. 88, issue C, 531-546

Abstract: Using a sample of Chinese A-share-listed manufacturing companies from 2011 to 2020, the impact of economic policy uncertainty (EPU) on business performance was analyzed. The results show that EPU is detrimental to improving business performance; service transformation can significantly offset the adverse effects of EPU on business performance. This positive effect increases with the depth of service transformation. Furthermore, embedded service transformation is more effective than mixed-service transformation in weakening the adverse effects of EPU on business performance. Additionally, the study found that the moderate effect is more noticeable in non-state-owned enterprises and low-sale growth firms. The results are robust after the specifications of many variables, possible endogeneity issues, and more control variables are considered.

Keywords: Economic policy uncertainty; Servitization; Business performance; Embedded; Mixed (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:88:y:2023:i:c:p:531-546

DOI: 10.1016/j.iref.2023.06.038

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