The asymmetric impact of economic policy uncertainty on firm-level investment in South Africa: Firm-level evidence from administrative tax data

Arbeitspapier

This paper uses firm-level data and a news-based measure of economic policy uncertainty to provide empirical evidence that economic policy uncertainty has a negative impact on firm-level investment in South Africa. Firms' investment decisions in response to uncertainty reflect firms' heterogeneity. Medium-sized firms and, to a different extent, small firms reduce their investment by much more than large firms in response to increased policy uncertainty. The relationship between firms categorized by size and the degree of financial constraints they face implies that financially constrained firms are more sensitive to uncertainty than large, unconstrained firms.

Object Details

• ISBN: 978-92-9256-990-7
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WIDER Working Paper ; No. 2021/52

Classification and Topics

• Classification: Wirtschaft ; Investment; Capital; Intangible Capital; Capacity
• Subject: economic policy uncertainty ; firm-level investment ; South Africa ; firm heterogeneity

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lesame, Keagile
• Event: Veröffentlichung
• (who): The United Nations University World Institute for Development Economics Research (UNU-WIDER)
• (where): Helsinki
• (when): 2021

Further information

• DOI: doi:10.35188/UNU-WIDER/2021/990-7
• Handle: http://hdl.handle.net/10419/243378
• Last update: 10.03.2025, 11:42 AM CET