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Pandemic uncertainty and firm investments

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  • Zhang, Li
  • Hu, Shiwei
  • Xu, Guoli

Abstract

Exploiting the World Uncertainty Index, we analyze the real impact of pandemic-related uncertainty on firm investments in a cross-country setting. Our findings show that high levels of pandemic uncertainty are negatively associated with firm investments. The adverse effect of pandemic uncertainty is substantially greater in financially constrained firms or small ones.

Suggested Citation

  • Zhang, Li & Hu, Shiwei & Xu, Guoli, 2023. "Pandemic uncertainty and firm investments," Finance Research Letters, Elsevier, vol. 55(PA).
    • Handle: RePEc:eee:finlet:v:55:y:2023:i:pa:s1544612323002969
    DOI: 10.1016/j.frl.2023.103924
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    More about this item

    Keywords

    Pandemic uncertainty; Investment; Financial constraint;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies

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