Political Uncertainty and Financial Firm Performance: Evidence from the Thai Economy as an Emerging Market in Asia

Worraphan Trakarnsirinont, Wisuttorn Jitaree and Wonlop Writthym Buachoom ()
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Worraphan Trakarnsirinont: Faculty of Business Administration, Chiang Mai University, Chiang Mai 50200, Thailand
Wisuttorn Jitaree: Faculty of Business Administration, Chiang Mai University, Chiang Mai 50200, Thailand
Wonlop Writthym Buachoom: KMITL Business School, King Mongkut’s Institute of Technology Ladkrabang, Bangkok 10520, Thailand

Economies, 2023, vol. 11, issue 1, 1-12

Abstract: This study analyzes the effects that certain political-uncertainty factors have on financial firm performance in the Stock Exchange of Thailand (SET). The results of a panel regression performed on a database of 7976 firm-years over 18-year unbalanced panel data from 2001 to 2018 show a mixed relationship between political uncertainty and firm performance. The constitutional reform harms the return on assets (ROA), and the government election and political protest significantly decreased the market value of equity (MVE). In contrast, constitutional reform increased MVE, and the government election positively impacted ROA. Therefore, this study emphasizes how political unpredictability is assumed to influence firm performance in Thailand’s economy, an Asian developing country.

Keywords: political uncertainty; policy uncertainty; firm-level performance; financial performance; return on assets; market value of equity (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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