| Title | Geopolitical Risk and Investment |
| Author | |
| Corresponding Author | Wang, Xinjie |
| Publication Years | 2023-11-01
|
| DOI | |
| Source Title | |
| ISSN | 0022-2879
|
| EISSN | 1538-4616
|
| Abstract | Using a news-based index of geopolitical risk (GPR), we document a strong negative relationship between firm-level corporate investment and GPR. When the GPR index doubles, next-quarter investment declines by 14% of its sample mean. The effect is more pronounced for firms with more irreversible investment or higher market power, confirming the real options theory. However, the effect is less significant for firms with a stronger ability to substitute labor for capital, a higher labor-to-capital ratio, or a higher labor share, supporting the convex return theory. Overall, our results suggest that the real options channel dominates the Oi-Hartman-Abel effect. |
| Keywords | |
| URL | [Source Record] |
| Indexed By | |
| Language | English
|
| SUSTech Authorship | First
; Corresponding
|
| WOS Research Area | Business & Economics
|
| WOS Subject | Business, Finance
; Economics
|
| WOS Accession No | WOS:001093422600001
|
| Publisher | |
| ESI Research Field | ECONOMICS BUSINESS
|
| Data Source | Web of Science
|
| Citation statistics | |
| Document Type | Journal Article |
| Identifier | http://kc.sustech.edu.cn/handle/2SGJ60CL/582752 |
| Department | Department of Finance |
| Affiliation | 1.Southern Univ Sci & Technol, Dept Finance, Shenzhen, Guangdong, Peoples R China 2.Rutgers State Univ, Rutgers Business Sch, Dept Finance & Econ, New Brunswick, NJ USA 3.Clemson Univ, Wilbur O & Ann Powers Coll Business, Dept Finance, Clemson, SC USA |
| First Author Affilication | Department of Finance |
| Corresponding Author Affilication | Department of Finance |
| First Author's First Affilication | Department of Finance |
| Recommended Citation GB/T 7714 |
Wang, Xinjie,Wu, Yangru,Xu, Weike. Geopolitical Risk and Investment[J]. JOURNAL OF MONEY CREDIT AND BANKING,2023.
|
| APA |
Wang, Xinjie,Wu, Yangru,&Xu, Weike.(2023).Geopolitical Risk and Investment.JOURNAL OF MONEY CREDIT AND BANKING.
|
| MLA |
Wang, Xinjie,et al."Geopolitical Risk and Investment".JOURNAL OF MONEY CREDIT AND BANKING (2023).
|
| Files in This Item: | There are no files associated with this item. | |||||
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