ItemArticle

Economic policy uncertainty and corporate inventory holding: evidence from emerging economies

Title
Economic policy uncertainty and corporate inventory holding: evidence from emerging economies
Creator
Mir, Shakeeb Mohammad; Sheikh, Irfan Ahmed; Muhmmad, Riyaz
Description
Purpose: This study aims to investigate how economic policy uncertainty (EPU) influences the inventory levels of 6,150 companies in ten emerging economies, specifically Chile, Brazil, China, Colombia, Hong Kong, India, Mexico, Pakistan, Russia and Singapore. Design/methodology/approach: The data used in this study is of quarterly frequency from 2004Q1 to 2020Q4 collected from the COMPUSTAT global database. To estimate the coefficients, this study has employed a two-step GMM model. Findings: We have discovered new evidence indicating a curvilinear relationship, specifically an inverted U-shaped pattern, between economic policy uncertainty (EPU) and corporate inventory holdings. These findings remain resilient when subjected to various rigorous tests. Furthermore, we observe that firms with lower financial constraints are capable of increasing their inventory holdings to a significant extent in the presence of high economic policy uncertainty (EPU) than firms facing higher financial constraints. Originality/value: Our research adds to the expanding body of literature that explores the impact of economic policy uncertainty on firm-level decision-making. We provide fresh evidence regarding the correlation between economic policy uncertainty and inventory holding, specifically focusing on emerging economies worldwide. Furthermore, we make a valuable contribution to the existing literature by examining whether the association between economic policy uncertainty and inventory holdings is influenced by the extent of financial constraints. 2025, Emerald Publishing Limited.
Source
Journal of Economic and Administrative Sciences;
Date
01-01-2025
Publisher
Emerald Publishing
Subject
Economic policy uncertainty; Emerging economies; Financial constraints; Inventory holding
Coverage
Mir S.M., School of Business and Management, Christ University, Bengaluru, India; Sheikh I.A., Department of Public Finance and Accounting, Ethiopian Civil Service University, Addis Ababa, Ethiopia; Muhmmad R., Department of Management Studies, PCI Azad Group of Institutions, Dr APJ Abdul Kalam Technical University, Lucknow, India
Rights
Restricted Access; Hardcopy may be available in the library
Relation
ISSN: 20546238;
Format
online
Language
English
Type
Article

Citation

Mir, Shakeeb Mohammad; Sheikh, Irfan Ahmed; Muhmmad, Riyaz, “Economic policy uncertainty and corporate inventory holding: evidence from emerging economies,” CHRIST (Deemed To Be University) Institutional Repository, accessed June 18, 2026, https://archives.christuniversity.in/items/show/22891.

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