Research On The Relationship Between Economic Policy Uncertainty And Investment Of Manufacturing Enterprises

After the financial crisis in 2008,the global economic growth rate dropped sharply.All countries have adopted a series of economy-intervention policies to avoid the continuous downturn of domestic economy.China has implemented an unconventional monetary policy and a positive fiscal policy to deal with the financial crisis.Policy fluctuation is frequent and policy uncertainty has been greatly improved.The improvement of uncertainty regarding economic policy will not only affect the macroeconomic operation,but also affect enterprises' micro-behavior.Meanwhile,there is a strong correlation between macroeconomy and business investment.Therefore,the continuous adjustment of macroeconomic policies in China will affect the investment activities of the company.For enterprises,investment activities are an important part of realizing the value-added of enterprises.Manufacturing enterprise investment is irreversible.It will cause some of the costs to be uncollectible when enterprises change their investment willingness.When this part of the cost is too high,corporate investment decision will be more cautious.There are many factors influencing the company's investment income.Among them,one important factor is the government's economic policy.To develop better,enterprises should study the government economic policies.For some sunrise industries,it is necessary to be supported by the government's policies in order to enter the maturity period faster.Policy shift can either prosper an industry or decline an industry.When a company intends to become pluralistic and develop new businesses,economic policies are important considerations for the decision-making process.Therefore,the uncertainty of economic policy will have a great impact on the future investment decisions of enterprises.This paper takes real option theory and financial friction theory as the theoretical basis.Based on the perspective of economic policy uncertainty,it analyzes the impact of economic policy uncertainty on the investment of listed manufacturing enterprises in China.It choosesShanghai-Shenzhen A-share manufacturing listed companies from 2008 to 2017 as the research object.The investment expenditure of enterprises is set as the explained variable and the China Economic Policy Uncertainty Index is set as the explanatory variable.Some indicator variables measuring the corporate investment opportunities,profitability,cash flow and assets and liabilities are controlled.Moderator variables like the irreversibility of investment are also added.All these variables are used to construct multiple regression models to analyze the impact of economic policy uncertainty on corporate investment,and the paper finally conducts a robust test on the main explanatory variables.Through the empirical test and analysis,it finds that there is a negative correlation between the uncertainty of economic policy and the investment of manufacturing enterprises.The negative impact of economic policy uncertainty on manufacturing enterprises investment is more obvious in non-state-owned enterprises.With the increase of investment irreversibility and the proportion of institutional investors' shareholdings,the negative impact will be stronger.Based on the above conclusions,in order to lessen the impact of economic policy uncertainty on corporate investment,this paper puts forward some relevant suggestions from the perspective of government and enterprises.On the one hand,the government should pay attention to the stability and sustainability of policies when making the economic policies.It should strengthen the communication with listed companies,develop secondary markets,and implement some encouraging policies.On the other hand,enterprises should broaden their financing channels and reduce financing costs.They can also introduce external institutional investors to improve the shareholding structure.