Political uncertainty and corporate investment: Evidence from India |
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Authors: | Sajad Bagow Nufazil Altaf |
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Institution: | Department of Humanities, Social Sciences and Management, NIT Srinagar, Srinagar, India |
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Abstract: | This article examines the relationship between political uncertainty and corporate investments in India. Using the data of 771 non-financial Indian firms for the period 2007 Q1 to 2020 Q4 and for three general elections, 2009, 2014, and 2019, the study confirms a significant negative impact of political uncertainty on corporate investments and a pronounced impact of political uncertainty on corporate investment in closely contested elections. Also, we find that corporate investment tends to rise post-election. Additionally, we find that the negative relationship between political uncertainty and corporate investment is more pronounced for politically sensitive industries and firms facing higher financial constraints. |
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Keywords: | corporate investment general elections India political uncertainty |
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