The impact of perceived economic policy uncertainty on firm value

Abstract

In recent years, the Brexit, Sino US trade frictions and the emergence of the COVID-19 epidemic have had a serious impact on the world economy, and economic policies have been introduced frequently. In this context, as rational economic entities, will the perception of macroeconomic policy changes by enterprises have an impact on their value? This article explores the impact of economic policy uncertainty on corporate value from the perspective of economic policy uncertainty.This article selects non-financial companies listed on the A-share market from 2014 to 2023 as samples, uses text mining methods to extract information from corporate annual reports, constructs micro level economic policy uncertainty perception indicators, studies their impact on corporate value, and further explores their mechanisms of action. Research has shown that there is a negative relationship between perceived economic policy uncertainty and firm value. When perceived uncertainty increases, investment decisions and daily operations are also affected, which in turn affects firm value.