Global Economic Policy Uncertainty as a Main Driver of Financial Impacts and Performances in the Financial Markets: Evidence from Emerging Market Economies

2020 ◽  
pp. 43-68
Author(s):  
Harun Turker Kara ◽  
Nildag Basak Ceylan ◽  
Ayhan Kapusuzoglu
Keyword(s):  
Economic Policy ◽  
Financial Markets ◽  
Emerging Market ◽  
Emerging Market Economies ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
Market Economies ◽  
Main Driver ◽  
Financial Impacts

Economic policy uncertainty and stock market liquidity

2018 ◽  
Vol 10 (1) ◽  
pp. 112-135 ◽  
Author(s):  
Byomakesh Debata ◽  
Jitendra Mahakud
Keyword(s):  
Economic Policy ◽  
Stock Market ◽  
Financial Crises ◽  
Emerging Market ◽  
Decomposition Analysis ◽  
Market Liquidity ◽  
Policy Uncertainty ◽  
Content Type ◽  
Economic Policy Uncertainty ◽  
Stock Market Liquidity

Purpose This study aims to examine the relationship between economic policy uncertainty and stock market liquidity in an order-driven emerging stock market. Design/methodology/approach Empirical estimates are based on vector autoregressive Granger-causality tests, impulse response functions and variance decomposition analysis. Findings The empirical findings suggest that economic policy uncertainty moderately influences stock market liquidity during normal market conditions. However, the role of economic policy uncertainty for determining stock market liquidity is significant in times of financial crises. The authors have also observed a significant portion of variation in stock market liquidity that is attributed to investor sentiments during financial crises. Originality/value This study is original in nature and provides evidence to consider economic policy uncertainty as a possible source of commonality in liquidity in the context of an emerging market.

scholarly journals The Heterogeneity Research of the Impact of EPU on Environmental Pollution: Empirical Evidence Based on 15 Countries

2021 ◽  
Vol 13 (8) ◽  
pp. 4166
Author(s):  
Ying Chen ◽  
Xiaoqian Shen ◽  
Li Wang
Keyword(s):  
Air Pollution ◽  
Economic Policy ◽  
Co2 Emissions ◽  
Energy Demand ◽  
Negative Impact ◽  
Emerging Market ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
Per Capita ◽  
The Impact

While economic growth has been the main goal of countries around the world, environmental problems such as air pollution have also arisen. Since the increase in economic uncertainty is limiting production capacity and consumers’ marginal propensity to consume, which reduces CO2 emissions, economic policy uncertainty has become one of the most important factors affecting CO2 emissions. COVID-19 has demonstrated that economic policy uncertainty reduces the enthusiasm of market participants, which, in turn, reduces energy demand and CO2 emissions. In order to further study the impact of economic policy uncertainty on air pollution, this study uses a panel model to empirically test the data for a sample of 15 countries covering the period from 1997 to 2019. According to the empirical results, we find that the economic policy uncertainty has a significant negative impact on per capita CO2 emissions. That is, the higher the uncertainty of economic policy, the lower the per capita CO2 emissions of countries. What’s more, this negative effect is larger in emerging market countries than in advanced countries.

Analysis of global economic policy uncertainty and export flows for emerging markets with panel VAR modeling

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Çağlayan Aslan ◽  
Senay Acikgoz
Keyword(s):  
Economic Policy ◽  
Emerging Markets ◽  
Emerging Market ◽  
Partial Least Square ◽  
Panel Var ◽  
Policy Uncertainty ◽  
Content Type ◽  
Economic Policy Uncertainty ◽  
The Real ◽  
Export Flows

PurposeThe purpose of this paper to examine how global economic policy uncertainty (GEPU) affects export flows of emerging market economies.Design/methodology/approachThis study examines the effect of GEPU on 28 emerging markets' export performance. GEPU variable used in the authors’ empirical analysis is measured by partial least square (PLS) factor loading model with the help of 24 countries' economic policy uncertainty index. A panel vector autoregression (VAR) model is employed for the estimations and monthly data over the 2006:01–2019:12 period are used.FindingsThe empirical findings show that while the real external income is the main factor that affects export flows, the real exchange rate is the least effective variable with regard to the variance decomposition, which is not expected by the related economic theory. Panel VAR estimations results confirm the previous studies and find that GEPU affects export flows negatively and significantly.Originality/valueTo the best of the authors’ knowledge, this is the sole study in terms of focusing on the impacts of GEPU on the export volume of emerging markets. The contribution of this paper is twofold. Firstly, a large set of countries with monthly frequented data that assist to capture uncertainties better is used. Secondly, the global economic policy index is obtained by employing the PLS method, which provides more robust results that are calculated with respect to the dependent variable.

Economic policy uncertainty and stock liquidity: the role of board networks in an emerging market

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
William Mbanyele
Keyword(s):  
Economic Policy ◽  
Adverse Effects ◽  
Emerging Market ◽  
Estimation Method ◽  
Policy Uncertainty ◽  
Stock Liquidity ◽  
Content Type ◽  
Economic Policy Uncertainty ◽  
Board Networks

PurposeThe purpose of this study is to examine the role of board networks in promoting stock liquidity when there is high economic policy uncertainty using a sample of Brazilian firms from 2002 to 2015.Design/methodology/approachThe study employs the ordinary least squares estimation method with standard errors clustered at the firm level for preliminary analysis, besides the study employs the two-step GMM dynamic estimation method to deal with potential endogeneity issues.FindingsFirst, the findings show that economic policy uncertainty disproportionately contributes to stock illiquidity and the impact is mainly prominent for high risky companies, small firms and firms in competitive industries. Second, the author provides evidence that board networks promote stock liquidity more via the information channel when economic policy uncertainty is very high.Practical implicationsGiven the adverse effects of economic policy uncertainty on stock liquidity, governments need to swiftly communicate and implement policies that affect the capital market to avoid the drying up of liquidity, which is exacerbated by communication or implementation lags. Also, there is a need for the regulators to continuously encourage the inclusion of independent directors in boards, which helps to increase board monitoring capacity and the firms' ability to respond to changes in the external environment.Originality/valueUnlike other studies that focus on the adverse effects of economic policy uncertainty on firm outcomes, the novel contribution is that the author uncovers the role of board networks in mitigating the negative effects of economic policy uncertainty on stock liquidity.

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