The effect of oil price uncertainty on corporate investment in the presence of growth options: Evidence from listed companies in China (1998–2019) |
| |
| Institution: | 1. International College of Zhengzhou University, Zhengzhou University, Zhengzhou 450052, China;2. Zhengzhou Key Laboratory of Big Data Analysis and Application, Henan Academy of Big Data, Zhengzhou University, Zhengzhou 450052, China;1. Financial Markets Department, Bank of Thailand, Bangkok, 10200, Thailand;2. Department of Economics, Johns Hopkins University, Baltimore, MD 21218, USA |
| |
| Abstract: | We empirically investigate the effect of oil price uncertainty on corporate investment in the presence of growth options using the financial data of listed firms in China from 1998 to 2019. We reveal three key findings in this paper. First, we find that oil price uncertainty has a U-shaped nonlinear effect on corporate investment. In periods of low uncertainty, oil price uncertainty negatively influences corporate investment. However, in periods of high uncertainty, oil price uncertainty positively influences corporate investment. Second, research has found that the U-shaped nonlinear effect is moderated by the irreversibility and growth opportunities of investment decisions. Third, further analyses reveal that this U-shaped nonlinear effect can be changed by a firm’s characteristics. Specifically, this nonlinear effect can only be observed in non-state-owned enterprises and small firms. We test the robustness of our findings and propose several policy suggestions. |
| |
| Keywords: | Oil Price Uncertainty Corporate Investment Irreversibility Growth Options |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
