Key points are not available for this paper at this time.
Our study investigates the effects of economic policy uncertainty (EPU) on firm-level innovation activities. Utilizing the news-based government EPU index of Baker et al. (2016) and a panel sample of 213 UK largest non-financial firms over the period 1999-2018, we find robust evidence that the government EPU has caused a substantial reduction in UK firms’ investment in innovation activities. Moreover, our results further show that such a lower level of corporate investment leads to a decline in their shareholder value, which forms a triangle linkage among EPU, investment and market value.
Nguyen et al. (Sat,) studied this question.