Local policy uncertainty and the firm's investment reaction to monetary policy

被引：1
|
作者：
Adra, Samer [1 ]
Gao, Yang [2 ]
Yuan, Jiayi [3 ]
机构：
[1] Univ Sheffield, Sheffield Univ Management Sch, Conduit Rd, Sheffield S10 1FL, England
[2] Univ Exeter, Business Sch, Rennes Dr, Exeter EX4 4PU, England
[3] Univ Leeds, Leeds Univ Business Sch, Maurice Keyworth Bldg,Woodhouse Lane, Leeds LS2 9JT, England
来源：
ECONOMICS LETTERS | 2024年 / 234卷
关键词：
Monetary policy; Capital investments; Local economic policy uncertainty;
D O I：
10.1016/j.econlet.2023.111473
中图分类号：
F [经济];
学科分类号：
02 ;
摘要：
Rising local economic policy uncertainty increases the firm's capital investment sensitivity to monetary shocks. This effect is driven by the tendency of uncertainty-driven precautionary behavior to increase the firm's propensity to reduce investment in response to contractionary monetary shocks. This effect is more pronounced for geographically bound firms that are financially constrained. Our results show how the investment effects of local economic policy uncertainty are entangled with the asymmetries that govern the economic impact of monetary policy.
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页数：4
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