State-level economic policy uncertainty (EPU) and firm financial stability: Is there any political insurance?

Authors

Ahmed W. Alam, Kean University
Ashupta Farjana, University of North Texas
Reza Houston, Ball State University

Document Type

Article

Publication Date

4-1-2023

Abstract

We examine the impact of state-level EPU (SEPU) on firm financial stability. SEPU erodes financial stability, regardless of firm size. Political connections moderate this effect, supporting the political insurance hypothesis. Stronger political ties reduce firm sensitivity to SEPU increases.

Publication Title

Economics Letters

DOI

10.1016/j.econlet.2023.111027

Recommended Citation

Alam, Ahmed W.; Farjana, Ashupta; and Houston, Reza, "State-level economic policy uncertainty (EPU) and firm financial stability: Is there any political insurance?" (2023). Kean Publications. 180.
https://digitalcommons.kean.edu/keanpublications/180