Study On The Impact Of Policy Uncertainty On Firm's Investment

After the international financial crisis,policy uncertainty became a common concern of the theoretical circle and policy makers.The importance of policy uncertainty has become even more prominent under the backdrop of the international economic recovery,unconventional policy tools,the complicated interaction of economic policies,and China's deepening reforms.However,for a policy-uncertainty such as a theoretically and practically important new issue,the current research at home and abroad appears to be inadequate,unsystematic,and imperfect.Both the theoretical basis and empirical evidence need to be further explored and complemented.At home,research on policy uncertainty has begun to emerge slowly,but its theoretical basis and mechanism of action are still relatively monotonous and the research perspective is rather limited.Overall,existing studies have failed to piece together the effects of policy uncertainty on corporate investment.The complete picture of the mechanism.Based on the theoretical importance of the issue and related research is still lacking considerations,this paper will systematically study and analyze the impact of policy uncertainty on corporate investment behavior,examine channels of policy uncertainty from different perspectives,and try to Find missing puzzles in existing literature.This dissertation hopes to make a systematic study and a panoramic view of the influence mechanism of policy uncertainty on corporate investment.First,on the basis of comprehensively reviewing existing researches,the relevant theories are tested to find the original source.Second,the existing influencing mechanisms are thoroughly discussed to clarify their respective influences.Innovatively propose new transmission channels and influence mechanisms to enrich and develop relevant literature.Finally,on the basis of this study and related research,policy recommendations are proposed.The empirical research of this paper mainly focuses on three important issues of corporate investment,namely,the quantity of investment,investment efficiency and investment structure.By studying how policy uncertainty affects corporate investment in fixed assets,investment in financial assets and investment efficiency,systematically discusses the influence and mechanism of corporate investment behavior.This article is tentatively divided into seven chapters.The main contents of each chapter are as follows:The first chapter is the introduction.It mainly introduces the general idea of the paper,including the background of the research,the research ideas,the basic logic,the main content of the research,and possible innovations and deficiencies.The second chapter is a review of the literature,which is mainly to systematically sort out and review the theoretical results and empirical conclusions related to this study.Specifically,it begins with the core concept of uncertainty,from its connotation evolution to the comparison of similar concepts.After the economic impact,the study focused on the influence of policy uncertainty and transmission mechanism,and finally reviewed and reviewed the literature on the influence of high-level echelon theory and the characteristics of executives on corporate behavior.The third chapter is the construction of the policy uncertainty index.Mainly by comprehensively reviewing the relevant literature,the methods and connotations of the construction of relevant uncertainties are classified and compared,and a variety of policy uncertainties with different connotations are constructed according to the actual conditions of the Chinese market and the availability of data.Conduct a thorough examination in subsequent studies.The fourth chapter studies the specific influence of policy uncertainty on corporate investment behavior.It mainly includes the study of the impact of policy uncertainty on the fixed asset investment behavior of enterprises,and the verification of the main influencing mechanisms in the existing literature.In addition,it also studies the impact of policy uncertainty after the impact of the time series and the financial cycle.The evolution of investment over time,and the impact of policy uncertainty under the monetary policy cycle on corporate investment.The fifth chapter discusses the impact of policy uncertainty on corporate investment efficiency.It is mainly to study whether policy uncertainty will affect the investment of enterprises—the sensitivity of investment opportunities.From the perspective of the characteristics of the company's decision makers and the efficiency of external capital markets,the reasons for changes in the sensitivity of investment by companies to investment opportunities are analyzed.Finally,this is based on group companies.An internal capital market further tests the conclusions of the study.The sixth chapter studies the influence of policy uncertainty on corporate financialization and fixed asset investment behavior.It is mainly to study the influence of policy uncertainty on corporate financial asset investment,and to explore the effect of corporate financialization on principal business and fixed asset investment from the perspective of investment competition.The seventh chapter is the conclusion,revelation and research prospect.After reviewing the research contents of the above sections,this chapter summarizes the research findings of the full text,and obtains some inspirational conclusions based on the empirical research results,and summarizes the deficiencies in the study of this paper,and the follow-up research direction.Through theoretical analysis and empirical research,this paper has obtained the following important conclusions:First,based on a comprehensive review of domestic and foreign uncertainty measurement methods and indicators,this paper constructs a policy uncertainty index applicable to China from different perspectives and uses them separately in subsequent empirical tests.Secondly,from the direction of impact,policy uncertainty has a deterrent effect on corporate investment in fixed assets,and this inhibitory effect will increase as the irreversibility of investment increases.On the other hand,due to the liquidity characteristics of financial assets,under the impact of policy uncertainty,the company's equity investment has increased,showing its tendency to financialization,and this tendency to financialization has been demonstrated in private companies or businesses that are relatively monotonous.Thirdly,from the influencing mechanism,through the comparative study of the theoretical mechanisms that influence the uncertainty of the company's investment,we find that the real option theory in China's A-share listed companies has stronger explanatory power and better description and forecasting capabilities.Financial friction theory has not been supported by empirical results.This may be due to the impact of policy uncertainty on the external capital market leading to a decline in market efficiency.Listed companies with a high degree of financial restraint have generally received credit and funding tilts,and corporate investment.The financial constraints have been reduced even more.From the perspective of behavioral finance,policy uncertainty has impact and influence on the beliefs and preferences of actors,and the behavioral people show stronger ambiguity avoidance and liquidity preference characteristics.Fourth,from the perspective of investment structure,policy uncertainty has not caused a significant decline in the overall investment expenditure of the company,but it has changed the investment structure of the entity.Specifically,policy uncertainty will increase the company's financial investment and inhibit the investment in fixed assets.This has,to a certain extent,caused the phenomenon of "realization and emptiness" in the financialization of industrial entities and industrial capital.In companies with a higher level of financialization,financial investment will promote the "reservoir" effect of fixed asset investment,but at the same time,financial investment will also increase the negative impact of policy uncertainty on fixed-asset investment,that is,financial investment The replacement and crowding-out effect of fixed asset investment.Fifth,in terms of dynamic changes,policy uncertainty plays a significant role in inhibiting fixed-asset investment in the short-term,but as forecasted by real options theory,it is delayed over time as information increases.Investment will rebound in concentration,and this process occurs about one and a half years after the impact of policy uncertainty.From the perspective of the monetary policy cycle,there is also an asymmetric effect of policy uncertainty on the fixed asset investment of enterprises,that is,the effect of restraining the monetary easing stage is significant,and the role of the monetary policy tightening stage is no longer significant,thereby resulting in the effectiveness of monetary policy.Asymmetry.This article explores the impact of policy uncertainty on corporate investment behavior from multiple perspectives,enriches the content of macroeconomic policy and micro-behavior research,and supplements literature on the macroeconomic policy transmission mechanism,the micro-impact of policy uncertainty,and the research on the factors affecting corporate investment.This will help to further understand the asymmetric effects of monetary policy and the phenomenon of corporate financialization and lay a foundation for further expansion.