Does geopolitical risk matter for corporate investment? Evidence from emerging countries in Asia

IF 2.9 3区经济学 Q2 BUSINESS, FINANCE

Journal of Multinational Financial Management Pub Date : 2021-12-01 DOI:10.1016/j.mulfin.2021.100703

Anh-Tuan Le , Thao Phuong Tran

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引用次数: 39

Abstract

This paper examines the effect of geopolitical risk on corporate investment in emerging Asian countries. Using an extensive sample spanning 1995–2018, we find that geopolitical risk is negatively associated with corporate investment. Geopolitical risks in China and Russia have a greater impact on corporate investment, while a less significant influence is found in India and Turkey. Our findings are robust to using alternative measures of geopolitical risk, using alternative proxies of investment, even after controlling for endogeneity concerns by a two-stage least square estimation, a system generalized method of moments regression, and the incremental effect of geopolitical risk. The adverse impact of geopolitical risk on firm investment is more pronounced for firms with a higher degree of investment irreversibility. However, firms with greater cash holdings can better mitigate this negative impact. Overall, this paper shows that geopolitical risk is a crucial macrolevel shock influencing corporate investment.

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地缘政治风险对企业投资有影响吗?来自亚洲新兴国家的证据

本文考察了地缘政治风险对亚洲新兴国家企业投资的影响。使用1995-2018年的广泛样本，我们发现地缘政治风险与企业投资呈负相关。中国和俄罗斯的地缘政治风险对企业投资的影响较大，印度和土耳其的地缘政治风险对企业投资的影响较小。即使在通过两阶段最小二乘估计、矩回归系统广义方法和地缘政治风险的增量效应控制了内生性问题之后，我们的研究结果对于使用地缘政治风险的替代度量、使用投资的替代代理都是稳健的。地缘政治风险对企业投资的不利影响对于投资不可逆性程度较高的企业更为明显。然而，拥有更多现金的公司可以更好地缓解这种负面影响。总体而言，本文表明地缘政治风险是影响企业投资的重要宏观冲击。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Multinational Financial Management BUSINESS, FINANCE-

CiteScore

7.30

自引率

4.80%

发文量

审稿时长

30 days

期刊介绍： International trade, financing and investments have grown at an extremely rapid pace in recent years, and the operations of corporations have become increasingly multinationalized. Corporate executives buying and selling goods and services, and making financing and investment decisions across national boundaries, have developed policies and procedures for managing cash flows denominated in foreign currencies. These policies and procedures, and the related managerial actions of executives, change as new relevant information becomes available. The purpose of the Journal of Multinational Financial Management is to publish rigorous, original articles dealing with the management of the multinational enterprise. Theoretical, conceptual, and empirical papers providing meaningful insights into the subject areas will be considered. The following topic areas, although not exhaustive, are representative of the coverage in this Journal. • Foreign exchange risk management • International capital budgeting • Forecasting exchange rates • Foreign direct investment • Hedging strategies • Cost of capital • Managing transaction exposure • Political risk assessment • International working capital management • International financial planning • International tax management • International diversification • Transfer pricing strategies • International liability management • International mergers.