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U.K. economic policy uncertainty and innovation activities: A firm-level analysis

Lookup NU author(s): Dr Vu TrinhORCiD



This work is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0).


Our study investigates the effects of economic policy uncertainty (EPU) on firm-level innovation activities. Utilising the news-based government EPU index of Baker et al. (2016) and a panel sample of 350 UK largest firms over the period 1999-2018, we find robust evidence that the government EPU has caused a substantial reduction in UK firms’ investment in innovation activities. Moreover, our results further show that such a lower level of corporate investment leads to a decline in their shareholder value, which forms a triangle linkage among EPU, investment and market value.

Publication metadata

Author(s): Nguyen HM, Trinh VQ

Publication type: Article

Publication status: Published

Journal: Journal of Economics and Business

Year: 2023

Volume: 123

Print publication date: 27/01/2023

Online publication date: 24/09/2022

Acceptance date: 17/09/2022

Date deposited: 21/09/2022

ISSN (print): 0148-6195

Publisher: Elsevier


DOI: 10.1016/j.jeconbus.2022.106093


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