Empirical Studyon Economic Policy Uncertainty,Financial Development And Enterprise Investment

Entering the 21 th century,Chinese economic policy uncertainty has increased substantially.The government is focusing on promoting financial development while formulating economic policies.The aims of the government are to guide the flow of the funds and realize the development of the real economy.As an important support of Chinese economy,the investment of manufacturing companies has attracted much attention.Because from 2004 to 2017,the investment level has dropped from 100% to 4.8%.The study of economic policy uncertainty on enterprise investment has realistic considerations.And further exploration of the regulatory role played by the financial development has the practical significance of guiding economic development.Then the research status on economic policy uncertainty,financial development and enterprise investment is studied.Then some problems are found.On this basis,the relevant theories are studied.There are there hypotheses.Hypothesis 1:When the EPU Index rises,the investment level of listed companies will decrease.Hypothesis2:When EPU Index rises,non-state-owned enterprises are much more affected.Hypothesis 3:When the level of financial development is higher,the impact of EPU on enterprise investment is smaller.Then the EPU Index is taken as the starting point and the panel data of 159 listedcompanies from 2000 to 2017 is used.The explained variable is enterprise investment.The explanatory variable is EPU Index.And the adjustment variable is the financial development.Besides,the control variables from the companies,industry and macro economy are selected.The system GMM method is used to study.A panel data model is constructed by using the EPU Index compiled by Baker et al..Main conclusions are as follows:(1)For listed companies in manufacturing,the negative correlation exists between the investment and EPU Index.(2)Distinguishing the nature of property rights,non-state-owned enterprise investment is more significantly affected.(3)Financial development plays a regulatory role in the suppression of EPU on enterprise investment.Finally,suggestions are put forward:The government should maintain policy consistency and shape credibility.The market should improve internal mechanisms and enhance self-regulation.Enterprises need to improve internal governance and operational standards.