Economic Policy Uncertainty and Financial Performance in Emerging Markets

Abstract

The objective of this study is to investigate the relationship between economic policy uncertainty (EPU) and financial performance using 5,509 firm-year observations from nine emerging markets which are Brazil, Chile, Colombia, Greece, India, Korea, Mexico, Pakistan, and Russia. The period of analysis spans the years between 2011-2022. Fixed-effects regressions show that there is a negative relationship between EPU and firm financial performance. Results are robust to different EPU measures. Implications are provided.