Policy uncertainty, derivatives use, and firm-level FDI
Article
Nguyen, Q., Kim, T. and Papanastassiou, M. 2018. Policy uncertainty, derivatives use, and firm-level FDI. Journal of International Business Studies. 49 (1), pp. 96-126. https://doi.org/10.1057/s41267-017-0090-z
Type | Article |
---|---|
Title | Policy uncertainty, derivatives use, and firm-level FDI |
Authors | Nguyen, Q., Kim, T. and Papanastassiou, M. |
Abstract | We explore the link between uncertainty in economic policy, firm level FDI, and firm hedging behaviour - building upon a newspaper-based index of economic policy uncertainty (EPU). We find that relative difference in EPU between home and host country has a significant relationship with FDI. Firms increase their FDI level in countries, which have a low level of EPU relative to their home country. In addition, firms use derivatives more intensively in response to an increase in EPU. Interestingly, the link between EPU and corporate derivatives use varies according to the type of firm. Domestic MNCs make the most effective use of derivatives to hedge against EPU exposure. |
Publisher | Palgrave Macmillan |
Journal | Journal of International Business Studies |
ISSN | 0047-2506 |
Electronic | 1478-6990 |
Publication dates | |
Online | 31 Jul 2017 |
01 Jan 2018 | |
Publication process dates | |
Deposited | 09 May 2017 |
Accepted | 14 Mar 2017 |
Output status | Published |
Publisher's version | License |
Accepted author manuscript | File Access Level Restricted |
Digital Object Identifier (DOI) | https://doi.org/10.1057/s41267-017-0090-z |
Language | English |
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