Research On The Impact Of Economic Policy Uncertainty On Firm Performance Under The New Economic Situation

Since the financial crisis in 2008,in order to avoid a serious economic recession,the Chinese government has launched an unprecedented 4 trillion stimulus plan,and in recent years it introduced a series of economic regulation and control policies such as de-leverage to collect money,tax cuts and fees.On the one hand,these new regulatory policies will help alleviate short-term economic problems.On the other hand,it may increase the uncertainty of China’s economic policies.Also,it makes it difficult for enterprises to form stable expectations for the future economic situation and prompts enterprises to change their business decision-making behaviors.Therefore,it would have an impact on business performance.In order to effectively quantify economic policy uncertainty,this paper uses the Economic Policy Uncertainty Index(EPU)jointly issued by Stanford University and the University of Chicago.Compared with the traditional measurement method,the index covers a wider range,with better continuity and time-varying,which could more accurately measure economic fluctuations.Currently,there is little academic research that links economic policy uncertainty with enterprise performance to explore the relationship behind it.Therefore,based on the financial panel data of China’s A-share listed companies in 2008-2017,this paper uses the factor analysis method to obtain the indicators of profitability and growth ability of enterprise performance,and then establishes a multiple regression model of the impact of economic policy uncertainty on firm performance.This paper would clarify the theoretical mechanism of the economic policy uncertainty affects enterprise performance,and uses the listed company’s profitability,growth ability index and China Economic Policy Uncertainty Index(EPU)to examine the impact of economic policy uncertainty on firm performance under the new economic situation..The research results show that the uncertainty of economic policy has an incentive effect on the profitability of listed companies in China,which is reflected in the uncertainty of economic policy that positively affects the profitability of listed companies in China.This is because listed companies have certain natural innovation and vitality characteristics.Uncertainty risks will encourage related companies to consolidate or enhance their market share through technological innovation activities,thereby it would help corporate gain more profits.At the same time,there is a significant negative correlation in growth ability between the economic policy uncertainty and listed companies in China.For listed companies with different characteristics,the economic policy uncertainty has a selective effect on corporate performance.Which the relationship between economic policy uncertainty and firm performance is the subject to corporate ownership,industry characteristics,and financial constraints and other factors.When the uncertainty of economic policy increases,the profitability of listed companies in China is more motivated,and the positive stimulus to the profitability of high-tech industries has a negative impact.AT the same time,the less financial constrained listed companies can be more flexible.They can adjust the allocation of funds,and seek a strategy that is more resistant to risks and achieve high returns,and promote the increase in corporate profitability.In addition,empirical research also shows that the financial constraints of listed companies and the growth ability of enterprises belonging to the high-tech industry will be more negatively affected.