The Impact of Economic Policy Uncertainty on Executives’ Self-Interest Behaviors: Evidence from China

Hong Huang, Chang Liu and Yuqian He ()
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Hong Huang: School of Finance and Business, Shanghai Normal University, Shanghai 200234, China
Chang Liu: School of Finance and Business, Shanghai Normal University, Shanghai 200234, China
Yuqian He: School of Finance and Business, Shanghai Normal University, Shanghai 200234, China

Sustainability, 2023, vol. 15, issue 3, 1-24

Abstract: This paper empirically studies the impact of economic policy uncertainty on executives’ self-interest behaviors, distinguishes explicit self-interest behaviors from implicit ones, and studies the moderating effect of internal control. The results illustrate that rising policy uncertainty will inhibit explicit self-interest behaviors of executives, yet the implicit ones will be encouraged. Internal control can regulate the above effects. Further research proves that the above-mentioned impact is more significant in state-owned enterprises (SOEs). Stable institutional investors and sound market competition can play a certain role in governance. Our paper contributes to the literature on the impact of economic policy uncertainty on corporate governance.

Keywords: uncertainty of economic policy; self-interest behavior of executives; corporate governance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
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