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

Tanveer Ahsan, Bakr Al-Gamrh and Sultan Sikandar Mirza
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Tanveer Ahsan: ESC [Rennes] - ESC Rennes School of Business
Bakr Al-Gamrh: ESC [Rennes] - ESC Rennes School of Business
Sultan Sikandar Mirza: Waikato Management School - Waikato University

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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)
Date: 2022-05
Note: View the original document on HAL open archive server: https://rennes-sb.hal.science/hal-03697003
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Citations: View citations in EconPapers (3)

Published in Finance Research Letters, 2022, 46, pp.102381. ⟨10.1016/j.frl.2021.102381⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03697003

DOI: 10.1016/j.frl.2021.102381

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