Economic Policy Uncertainty and Corporate Investment Efficiency: Evidence from Australian Energy Companies
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Keywords:Economic Policy Uncertainty, Corporate Investment Efficiency, Energy Company, Australia
AbstractThis study examines the impact of Economic Policy Uncertainty (EPU) on corporate investment efficiency. I argue that EPU increases financing constraints or induces firms to postpone investment projects, thereby reducing their investment efficiency. Using a data set of Australian energy firms from 2010 to 2022 and the EPU index of Australia, the findings show that the EPU index has a significant and negative effect on corporate investment efficiency. The results hold in fixed-effects and dynamic GMM models and after control for firm-specific factors, suggesting that a macroeconomic factor like the EPU index also plays an important role in determining the efficiency of Australian energy companies’ investments.
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How to Cite
Trinh, N. (2024). Economic Policy Uncertainty and Corporate Investment Efficiency: Evidence from Australian Energy Companies. International Journal of Energy Economics and Policy, 14(1), 53–60. https://doi.org/10.32479/ijeep.15001