DOAJ Open Access 2021

Economic policy uncertainty and overinvestment: evidence from Korea

Wenwen Jiang Hwa-Sung Kim

Lihat Sumber DOI

Abstrak

The authors show that there is a negative relationship between economic policy uncertainty (EPU) and firm overinvestment using Korean data from 2007 to 2016. Since Jensen (1986) shows that a firm's free cash flow is an important factor of overinvestment, the authors examine how free cash flow influences the sensitivity of overinvestment to EPU. The authors find that a high level of free cash flow attenuates the negative effect of EPU on overinvestment. The authors find that there is no significant difference in the effect of EPU on overinvestment between Chaebol (Korean family-run conglomerates) and non-Chaebol firms, which is consistent with the literature that the features of Chaebol are weakening.

Topik & Kata Kunci

Finance Risk in industry. Risk management

Penulis (2)

Wenwen Jiang

Hwa-Sung Kim

Format Sitasi

APA MLA BibTeX

Jiang, W., Kim, H. (2021). Economic policy uncertainty and overinvestment: evidence from Korea. https://doi.org/10.1108/JDQS-05-2021-0010

Akses Cepat

Lihat di Sumber doi.org/10.1108/JDQS-05-2021-0010

Informasi Jurnal

Tahun Terbit: 2021
Sumber Database: DOAJ
DOI: 10.1108/JDQS-05-2021-0010
Akses: Open Access ✓