Economic Policy Uncertainty and Corporate Investment: Moderating Role of Corporate Governance and Firm Life Cycle

Abstract: This study investigates the relationship between Economic Policy Uncertainty (EPU) and Corporate Investment (CI). Additionally, we assesses the moderating role of corporate governance and firm life cycle in determining the EPU-CI relationship. Using the sample of 548 listed non-financial Indian firms, we found that EPU has a negative and significant relationship with corporate investment. Secondly, we find that corporate governance plays a moderating role by reducing the negative impact of EPU on corporate investment. Further, we found that the negative impact of EPU on corporate investment is the least for growing firms, followed by introductory, mature, and declining stages. Keywords: Corporate Investment, Economic Policy Uncertainty, Corporate Governance, Emerging Economies JEL Classification Number: F40, G18, G31, M41