| ID | 193777 |
| Title Proper | Catching the political leader's signal |
| Other Title Information | Economic policy uncertainty and firm investment in China |
| Language | ENG |
| Author | Ito, Asei |
| Summary / Abstract (Note) | This study uses a text dataset of the Chinese President's speeches and reports from November 2012 to December 2021 to construct an original economic policy uncertainty (EPU) index: President Xi Jinping's EPU (XiEPU). XiEPU moderately correlates with a previous study's representative EPU, showing notably different peaks. Our index spiked in April 2016 and January 2017. Using firm-level panel data from 2012 to 2019, we find that a higher value of XiEPU is associated with a lower investment rate at the quarterly level. Moreover, there are noteworthy heterogeneous effects among firms and periods. Specifically, we find a stronger effect of XiEPU on manufacturing sectors, a weaker effect on state-owned enterprises, and a stronger effect in the second term of Xi Jinping's presidential tenure after November 2017. |
| `In' analytical Note | China Economic Review Vol. 81; Oct 2023: p. 102035 |
| Journal Source | China Economic Review 2023-10 81 |
| Key Words | Political Leader ; Economic Policy ; firm investment in China |