Economic Policy Uncertainty,Business Group and Corporate Investment Efficiency
Using a sample of Chinese A-share listed firms from 2008 to 2023,this paper investigates how e-conomic policy uncertainty affects corporate investment efficiency from the perspective of business group. We find that economic policy uncertainty reduces corporate investment efficiency. By reducing financial con-straints and diversifying business risks,business groups can not only mitigate under-investment of firm due to economic policy uncertainty,but also amplify over-investment of firm due to economic policy uncertainty by exacerbating agency problems. Further,in the face of economic policy uncertainty,it is more necessary for private firms or firms in regions with a lower level of marketization to adopt a group strategy to alleviate their under-investment,but a group strategy may also exacerbate over-investment by these firms. An increase in the level of marketization can be used as an alternative to group strategy to alleviate financing constraints and under-investment caused by economic policy uncertainty,but it can also avoid over-invest-ment by group members in the face of economic policy uncertainty. This paper helps to identify the effective boundary of the group strategy in hedging macro policy risks,and to understand the mutual relations between business groups and market mechanisms when confronted with economic policy uncertainty. In clos-ing,it may additionally provide policy advice on the construction of large-scale business groups and the en-hancement of investment efficiency.
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维普
