The asymmetric impact of economic policy uncertainty on firm-level investment in South Africa: Firm-level evidence from administrative tax data

Keagile Lesame

No wp-2021-52, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This paper uses firm-level data and a news-based measure of economic policy uncertainty to provide empirical evidence that economic policy uncertainty has a negative impact on firm-level investment in South Africa. Firms' investment decisions in response to uncertainty reflect firms' heterogeneity. Medium-sized firms and, to a different extent, small firms reduce their investment by much more than large firms in response to increased policy uncertainty.

Keywords: Economic policy; policy uncertainty; Investment; South Africa; Firm heterogeneity (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-sbm
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