Policy Uncertainty, Irreversibility, and Cross-Border Flows of Capital
By Brandon Julio, Youngsuk Yook. 2013
403 citations recorded by the source corpus.
We examine the effects of political uncertainty on cross-border capital flows using election timing as a source of fluctuations in political uncertainty. FDI flows from US companies to foreign affiliates drop significantly during the period just before an election and increase after the uncertainty is resolved, consistent with the view that political uncertainty deters foreign investment. The electoral patterns in FDI flows are more pronounced when elections are more competitive. The impact of political uncertainty on FDI flows depends on the level of institutional quality. Countries with higher levels of institutional quality experience significantly less variation in FDI around election cycles.
Subfields: Economics and Econometrics, Finance
View Paper: https://www.semanticscholar.org/paper/4d1aab86daa3b866f897c62c708f11b038acf25b
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In Economics and Econometrics
- Tiecheng Leng
- Brandon Julio
- Julian Atanassov
- Xunpeng Shi
- Longjian Yang
- Jian Yu
- Devi Prasad Dash
- Dongmei Guo
In Finance
Citations in the corpus
- Does policy uncertainty affect mergers and acquisitions? (2017, neutral): “(2)At the macroeconomic level, policy uncertainty influences capital flows, drives the business cycle, and impedes economic recovery (Bloom et al., 2014; Baker, Bloom, and Davis, 2016; Julio and Yook, 2016).”
- Economic policy uncertainty (EPU) and firm carbon emissions: Evidence using a China provincial EPU index (2020, background): “Julio and Yook (2016) revealed that FDI flows from US firms to foreign firms, and outward FDI (OFDI) dropped when uncertainty was high.”
- The Bright Side of Political Uncertainty: The Case of R&D (2015, background): “23As noted in Kahin and Hill (2013), Democrats tend to engage in specific, identifiable national goals, such as safe and clean energy, exploring and learning about space, o r wiring the nation.”
- Foreign Aid, FDI and Economic Growth in South-East Asia and South Asia (2020, background): “Besides Singapore, Malaysia, Thailand, Bangladesh and India, rest of the region has exhibited macroeconomic instability: volatile economic growth, bouts of higher inflation and higher fiscal deficit (Crowley & Lee, 2003; Cushman, 1988; Julio & Yook, 2016; Lemi & Asefa, 2003).”