How Does Trade Uncertainty Affect Corporate Investment?

After China’s accession to the WTO in 2001,the United States decided to grant China the most-favored-nation status,which caused the trade uncertainty between the two countries.This article uses China’s accession to the WTO as a quasi-natural experiment to analyze the impact mechanism of the declining in trade policy uncertainty on the investment of enterprises on the micro enterprise level.Based on the research on the fixed asset investment and difference-in-difference method of Chinese listed companies from 2000 to 2007,the following conclusions were found:After China’s accession into the WTO,the investment of enterprises has increased significantly,which means that the decline in trade uncertainty can significantly stimulate enterprises to increase investment behavior.Further research on the investment structure of enterprises shows that the decline in trade uncertainty will significantly promote enterprises to increase short-term investment.And on the whole,companies with lower operating and financial risks are more inclined to short-term investments.It can be seen that the uncertainty of trade policy has promoted the short-term investment.However,the effectiveness of this policy was limited,and it is subject to the companies’operating abilities and financial situations.The research in this article will be helpful to analyze the investment behavior of enterprises in the face of trade uncertainty,especially in the wave of anti-globalization in recent years,which has important practical significance.