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

Author

Listed:
  • 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)

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.

Suggested Citation

  • Tanveer Ahsan & Bakr Al-Gamrh & Sultan Sikandar Mirza, 2022. "Economic policy uncertainty and sustainable financial growth: Does business strategy matter?," Post-Print hal-03697003, HAL.
    • Handle: RePEc:hal:journl:hal-03697003
    DOI: 10.1016/j.frl.2021.102381
    Note: View the original document on HAL open archive server: https://rennes-sb.hal.science/hal-03697003
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    References listed on IDEAS

    as
    1. Guceri, Irem & Albinowski, Maciej, 2021. "Investment responses to tax policy under uncertainty," Journal of Financial Economics, Elsevier, vol. 141(3), pages 1147-1170.
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    Cited by:

    1. Al-Gamrh, Bakr & Rasul, Tareq, 2024. "Recession-proof marketing? Unraveling the impact of advertising efficiency on stock volatility," International Review of Financial Analysis, Elsevier, vol. 92(C).
    2. Ren, Xiaohang & Xia, Xixia & Taghizadeh-Hesary, Farhad, 2023. "Uncertainty of uncertainty and corporate green innovation—Evidence from China," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 634-647.
    3. Tanveer Ahsan & Sultan Sikandar Mirza & Ammar Ali Gull & Muhammad Ansar Majeed, 2023. "How to deal with customer and supplier concentration to attain sustainable financial growth? The role of business strategy," Business Strategy and the Environment, Wiley Blackwell, vol. 32(7), pages 4600-4619, November.
    4. Siddhartha Barman & Jitendra Mahakud, 2025. "Assessing the Impact of Policy Uncertainty, Geopolitical Risk, and Sustainable Disclosure on Corporate Performance," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 32(1), pages 167-203, March.

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