The impact of macroeconomic uncertainty on corporate investment the case study of vietnam shareholder

UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM ERASMUS UNVERSITY ROTTERDAM INSTITUTE OF SOCIAL STUDIES THE NETHERLANDS VIETNAM – THE NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS “THE IMPACT OF MACROECONOMIC UNCERTAINTY ON CORPORATE INVESTMENT” THE CASE STUDY OF VIETNAM BY NGUYỄN NGỌC PHƯƠNG LINH MASTER OF ARTS IN DEVELOPMENT ECONOMICS HO CHI MINH CITY, DECEMBER 2017 UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM INSTITUTE OF SOCIAL STUDIES THE HAGUE THE NETHERLANDS VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS “THE IMPACT OF MACROECONOMIC UNCERTAINTY ON CORPORATE INVESTMENT” THE CASE STUDY OF VIETNAM A thesis submitted in partial fulfilment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS By NGUYỄN NGỌC PHƯƠNG LINH CLASS 22 Academic Supervisor: DR NGUYỄN THU HIỀN HO CHI MINH CITY, DECEMBER 2017 ACKNOWLEDGEMENTS To complete the dissertation, I received a lot of attention, help from the school, lecturers, friends and relatives First of all, I would like to express my gratitude to Dr Nguyen Thu Hien, who gave her heartfelt guidance, specific comments and encouragement throughout my thesis’s implemented process Special thank goes to Mr Nguyen Thanh Vinh for his supports in analyzing the data Sincerely I appreciate lecturers teaching Vietnam – the Netherlands programme for M.A in Development Economics who have conveyed valuable knowledge, practical experience for me during the study program Finally, it is pleased to thank my friends and family for their support and encouragement throughout the course of my dissertation Ho Chi Minh City, December 2017 Performer NGUYỄN NGỌC PHƯƠNG LINH i ABSTRACT Employing proxies of macroeconomic uncertainty of Baum et al (2005), I am based on the proposed empirical model of Gulen and Ion (2015) to examine how corporate capital investment is affected by macroeconomic uncertainty for enterprises of Vietnam in the period of 2005 and 2015 My estimates present that the research has strongly explained a negative relationship between the volatility of macroeconomic in real GDP, CPI and the activities of capital expenditures in general as well as mergers and acquisitions in particular More importantly, this effect is significantly stronger for firms with a higher growth rate and non – financial constraints Overall, the study contributes to confirming macroeconomic uncertainty to limit the investment of enterprises and subsequently depress Vietnam economic growth JEL classifications: E20, E22, E44, E60, E63, G30, G32, G34 Key words: corporate investment, mergers and acquisitions, macroeconomic uncertainty, ARCH (GARCH), financial constraints, growth potential ii COMMITMENT I pledge that the contents of this dissertation conducted under the direct guidance of Dr Nguyen Thu Hien All references in the dissertation are clearly quoted in the name of the author, the name of the work, the time and place of publication Any unauthorized copying, violation of training regulations, or fraud, I will take full responsibility Ho Chi Minh City, December 2017 Performer NGUYỄN NGỌC PHƯƠNG LINH iii TABLE OF CONTENTS ACKNOWLEDGEMENTS i ABSTRACT ii COMMITMENT .iii TABLE OF CONTENTS iv TABLES vi FIGURES AND ILLUSTRATIONS vii ABBREVIATIONS viii CHAPTER INTRODUCTION 1.1 Background 1.2 Research objectives 1.3 Research objects and scopes 1.3.1 Research objects 1.3.2 Research scopes 1.4 Research methodology 1.5 Research significance 10 1.6 Research structure 11 CHAPTER LITERATURE REVIEW 12 2.1 The relationship between macroeconomic uncertainty and investment 12 2.1.1 Macroeconomic uncertainty 12 2.1.2 Corporate investment 14 2.1.3 Factors impacting on the investment of enterprises 15 2.1.4 Impact of macroeconomic uncertainty on corporate investment 17 2.1.5 Robustness check-sub-sample categories 19 2.2 Previous researches 19 2.3 Suggested models and hypotheses 23 CHAPTER RESEARCH METHODOLOGY 25 3.1 Analytical framework 25 3.2 Data 26 3.3 Empirical model 26 3.4 Variable measurement 28 3.4.1 Dependent variable 28 3.4.2 Independent variable 28 iv 3.4.3 Controlling variables 28 3.4.4 Variables for categorizing subsamples 28 3.5 Estimation method 29 CHAPTER RESEARCH RESULTS 31 4.1 Measuring macroeconomic uncertainty 31 4.2 The link between macroeconomic uncertainty and corporate investment 33 4.2.1 Summary statistics 33 4.2.2 Correlation matrix 36 4.2.3 Results for all firms 37 4.2.3.1 MU1 – GDP and corporate investment 38 4.2.3.1.1 MU1 – GDP and capital expenditure proxy 38 4.2.3.1.2 MU1 – GDP and mergers and acquisitions proxy 39 4.2.3.2 MU2 – CPI and corporate investment 41 4.2.3.2.1 MU2 – CPI and capital expenditure proxy 41 4.2.3.2.2 MU2 – CPI and mergers and acquisitions proxy 42 4.2.4 4.3 Results for firms classification 43 4.2.4.1 MU1 – GDP and capital expenditure regarding growth potential 44 4.2.4.2 MU1 – GDP and capital expenditure regarding financial constraints 45 4.2.4.3 MU2 – CPI and capital expenditure regarding growth potential 47 4.2.4.4 MU2 – CPI and capital expenditure regarding financial constraints 48 Discussions 49 CHAPTER CONCLUSIONS 51 5.1 Overview outcomes 51 5.2 Research limitations 54 REFERENCES 55 APPENDICES 58 v TABLES Table 2.1: Expectation of the relationship between macroeconomic uncertainty and corporate investment………… 18 Table 4.1: Augmented Dickey – Fuller Unit Root Test for MU proxies 32 Table 4.2: The time series results of variables representing macroeconomic uncertainty 32 Table 4.3: Summary statistics 34 Table 4.4: Correlation matrix 36 Table 4.5: Results of regression model of MU1GDP on CAPEX 39 Table 4.6: Results of regression model of MU1GDP on M&A 40 Table 4.7: Results of regression model of MU2CPI on CAPEX 42 Table 4.8: Results of regression model of MU2CPI on M&A 43 Table 4.9: Impact of MU1GDP on CAPEX regarding growth potential 45 Table 4.10: Impact of MU1GDP on CAPEX regarding financial constraints 46 Table 4.11: Impact of MU2CPI on CAPEX regarding growth potential 47 Table 4.12: Impact of MU2CPI on CAPEX regarding financial constraints 48 vi FIGURES AND ILLUSTRATIONS Figure 1.1: The criterion of Maastricht Treaty of Vietnam Figure 1.2: Real GDP growth in Vietnam, advanced economies, emerging and developing economies, and the world Figure 1.3: The proportion of inflation and the growth of investment of Vietnam Figure 1.4: Mergers and Acquisitions (M&A) of Vietnam Figure 3.1: Framework of the relationship between macroeconomic uncertainty and corporate investment…… 25 vii ABBREVIATIONS CAPEX Capital Expenditure CAPEXTA Capital Expenditure to Total Assets CAPX Capital Investment CF Cash Flow CFTA Cash Flow to Total Assets CPI Consumer Price Index EU European Union FC Financial Constraints FE Fixed Effect GDP Gross Domestic Product HNX Ha Noi Stock Exchange HOSE Ho Chi Minh Stock Exchange IMF International Monetary Fund MADUMMY Merges and Acquisitions Dummy MU Macroeconomic Uncertainty NFC Non – Financial Constraints OLS Ordinary Least Square PU Policy Uncertainty RE Random Effect SG Sales Growth TA Total Assets TQ Tobin’s Q UK United Kingdom UPCOM Unlisted Public Company Market US United States WTO World Trade Organization viii respect to non – financial constraints firms and there is no correlation between MU2CPI and CAPEX/TA in group of financial constraints Overall, most values of sales growth have no impact on corporate investment apart from low payout ratio sample By contrast, the financial indicators of Tobin’s Q are positively affected to CAPEX/TA at a 1% significance level for all groups To be more specific, the corporate investment is more strongly influenced by Tobin’s Q for firm size sample of non – financial constraints which are same as in payout ratio groups In a circumstance of CF/TA variables, there is a less strongly significant correlation in non – financial constraints than financial constraints This also happens similarly in national election variable Furthermore, I regression of the relationship between the volatility of macroeconomics on M&A activities and obtain the qualitatively similar results as for the capital expenditures For brevity, the results are not reported in this thesis In other words, it is more statistically significant for samples of high growth firms and non – financial constraints Besides, the signs of these relations among dependent variable and independent variables are primarily as same as previous expectations The analysis is not mentioned in this section and is referred to the Appendix instead 4.3 Discussions From the results presented above, it is associated to show that the Random Effect model obtains the best outcomes In general, most variables give the same expectations as the original studies with high statistical significance Two variables representing macroeconomic uncertainty including real GDP and consumer price index have a negative impact on corporate investment Regarding the proxies of macroeconomic uncertainty MU1 – GDP and MU2 – CPI, the results are specifically illustrated as follows: Sales growth is an important financial indicator to help enterprises increase investment The regression results are statistically significant at the total sample of all enterprise in the market but have little or no statistical significance in the subsamples of growth potential and financial constraints, especially for the M&A activities It can be seen from the outcomes that Tobin's Q has the positive effect on capital expenditure and most of them are significant at high levels for total sample as well as subsamples of firms’ characteristics This index represents the strength of the stock market The high value Tobin's Q makes it easy for firms to attract capital from investors through the issuance of shares However, this indicator generally has no impact on M&A activity in all firms and subsamples of growth potential and financial constraints 49 According to the analysis, another important financial index, cash flow to total assets, has the most positive impact at the quite high significance level of capital expenditure and the low significance level of M&A activities with the highest level of 10% This indicator explains the net result for the business activities of the enterprises, the net accumulated earnings for the activities to reinvest for the next period The ELECTION dummy variable has a high statistical significance in the model and most have a negative impact on corporate investment when considering the volatility of the MU1GDP on the CAPEX However, when examining the relation of MU1GDP on M&A, the outcomes of election effect are opposite to the original anticipations The cause may be that enterprises have not paid much attention to changes in policies or management from the elections, or businesses have a greater expectation of how management changes in the future On the other hand, MU2CPI brings the negative impact on M&A which is different from MU1GDP’s correlation Therefore the positive change of election sign is unsubstantial in this case because most consequences consider the negative relationship between election and corporate investment Eventually, GDP growth generally has the same positive effect as expected in all proxies of macroeconomic uncertainty The results are also good considering the impact of MU on CAPEX and MADUMMY in each subsample of growth potential and financial constraints In this circumstance, GDP growth with one lag time affects the investment of the business in a positive way, making enterprises increase investment From the outcomes achieved, when comparing the two groups of firms based on the growth potential and financial constraints, it can be considered that there is no evidence of statistical significance between the high growth and low growth firms in terms of MU1GDP proxy whereas firms with high growth is more strongly affected by MU2CPI than opposed subsample In addition, it is determined that both proxies of macroeconomic uncertainty have a greater impact on CAPEX/TA and MADUMMY variables regarding non – financial constraints enterprises compared to financial constraints like anticipations Enterprises with high growth rates and no capital constraints will easily create and attract more opportunities for investment and expansion of their businesses Hence, when the economy is unstable, these companies will suffer more and more serious risks and injuries than others 50 CHAPTER 5.1 CONCLUSIONS Overview outcomes In order to assess the impact of macroeconomic uncertainty on corporate investment, the study is carried out constructing data set of financial and non – financial enterprises listed on the Ho Chi Minh Stock Exchange (HOSE), Hanoi Stock Exchange (HNX), and Unlisted Public Company Market (UPCOM) in a case of Vietnam during the period of 2005 and 2015 The paper employs panel data regression combined with various empirical models to determine this relationship My study covers the period of 11 years from 2005 to 2015 on the purpose of spanning distinctive events comprising the global crisis by 2008 and the 2006 and 2011 national elections of Vietnam Congress so as to judge the level of impact of macroeconomic volatility and the management of state governance through election Besides, to increase the number of observations with respect to the value of investment, typically capital expenditure and M&A activities, for firms listed on the three stock exchanges, it is needed to spread the research sample as of 2015 As can be stated that macroeconomic uncertainty is manifested at many levels and in many different forms, this also leads to the basis for many variables represent the volatility of macroeconomics In other words, my research develops two new indices of macroeconomic uncertainty which are the real gross domestic product (GDP) and the consumer price index (CPI) by using ARCH (GARCH) model to compute the values of these proxies based on the method of Baum (2005) In association with the regression model of Gulen (2015), the obtained results provide the strongest evidence that an increase in the volatility of macroeconomics leads to a decrease in corporate investment in Vietnam regarding both proxies of macroeconomic uncertainty Through the empirical outcomes of research, the bad impact of macroeconomic volatility on the corporate investment causes to obstruct the investment decision of enterprises and be an evidence supporting the theory of the impact of any macroeconomic stability on corporate financial policy Compared to the previous literatures, this conclusion is consistent with the reality in countries around the world Macroeconomic uncertainty has led to high inflation, current account deficits, low foreign exchange reserves, high foreign debt and budget deficits as well as reduction of consumption growth which are a burden on most small and medium enterprises in Vietnam This led to a 51 decline in investment, to put enterprises at risk, lose large contracts, shrink production and ultimately go bankruptcy In general, the results of the study show that merger and acquisition activity is significantly correlated with macroeconomic uncertainty However, it can be said that the M&A activities have not been substantially affected by the crisis period as it is a relatively new form of investment in Vietnam over the period 2005 to 2015 By 2015, new mergers and acquisitions of large value and volume are emerging, and are dominated by finance, banking, insurance and real estate Therefore, this is a reason why the financial indicators as well as the events of socio – political situation in Vietnam have not had a profound effect on this sector in the research sample M&A is considered to be an ideal concept for future researchers to engage in the analysis so as to clarify more sustainable investment activity related to mergers and acquisitions in a circumstance of Vietnam A further investigation suggests that a high degree of three financial indicators of sales growth, Tobin’s Q and cash flow to total assets ratio is associated with more corporate investment, especially capital expenditure However, it is a few or no evidence for demonstrating the effect of these indicators on M&A activities due to the insignificant magnitude of this sector in Vietnam The empirical results show the statistical significance of the sales growth on capital expenditure for firms in Vietnam It expresses an important condition to help businesses increase investment to expand production in many sectors and spread out the scale of firms, market share, promote business growth and develop not only in the native country but also in the international market In particular, Tobin’s Q generally leads to the positive correlation with capital expenditure as same as the results of past economists This index represents the strength of the stock market, and its high value makes convenient conditions for entrepreneurs to attract capital from investors through the issuance of shares The result is in line with the findings obtained by the original paper that national election has a negative effect on capital investment This implies that the national elections seem to mark the radical change of political and economic views and also create the expectation that will be a significant change in macroeconomic management issues in the economy Hence, that may be the reason why the elections cause much uproar on the investment of enterprises 52 The positive impact is found in the relation between the growth of GDP and corporate investment The outcomes are consistent with the original research that the relationship between investment and GDP growth is moving and transforming Investment and growth often interact in a positive way, meaning that high GDP growth is a high value of investment This conclusion is consistent with Oglietti (2007), Abello (2010) and Villegas – Zermeño (2012) who conduct econometric studies in Argentina and Mexico and demonstrate that Economic Growth is the biggest attraction generating investment In addition, the study finds that the effects of macroeconomic uncertainty in regard to decreasing the value of corporate investment are consistently observed for higher growth potential enterprises and more financially unconstrained enterprises To be more specific, the degree of financial constraints is strongly relying on the size as well as the payout ratio of firms Although the empirical analysis achieved does not demonstrate precisely the influence of this MU1 – GDP on capital expenditure when covering the pattern of growth potential, it is clearly determined this negative relation in the rest cases of MU2 – CPI for two measures of corporate investment These outcomes depict a dynamic picture of the investment behavior of Vietnamese enterprises when confronted with the volatility of macroeconomics To sum up, in the period from 2005 to 2015, the Vietnamese economy has experienced changes in two phases In the period from 2005 – 2007, the economy has not shown much uncertainty, the period 2008 – 2010 has revealed many signs of concern Vietnam's economic situation in this period can be summed up in three phrases comprising low growth, high inflation and instability Apart from the inherent causes of the economy reflected by macroeconomic variables and inappropriate policy adjustments, the causes of macroeconomic uncertainty in Vietnam in these periods are mainly comes from external shocks The economy has started to decline since 2008, but the impact of the global financial crisis was real in 2009, when exports dropped 6.8% and foreign investment halved to just 14,9% compared to the time joining the WTO Although the growth rate was improved in 2010 due to the policy of stimulating demand through increased public investment, the rise in inflation has reduced the purchasing power of the population in the next two years, causing a sharp decrease in consumption Economic growth slowed down in the following years from 2011 to 2015 The impact of macroeconomic uncertainty is a common and unavoidable effect for all businesses because it is cyclical but has different effects for various sized enterprises or different management practices of joint ventures These results of my 53 analysis have clear implications for the conduct of macroeconomic policy of governances in general and corporate decisions of managers in particular in Vietnam Thus, policy makers and entrepreneurs should take into account the conclusions of this research since it is the essential and practical evidence in order to analyze as well as expect the direction and magnitude of macroeconomic volatility on Vietnamese small and medium sized enterprises and then implement the most plausible fiscal and monetary policies as well as the adjustment of management, short term and long term objectives in a plenty of detailed situations of socio – political economy in a nation 5.2 Research limitations In addition to proxies for macroeconomic uncertainty such as GDP and CPI, the paper expects to include additional macro variables for measurement such as IPI, the market return as well as additional independent variables that may affect corporate investments such as fluctuations in interest rates, exchange rate rates, etc Furthermore, consideration of the impact of macroeconomic instability on investment for each industry and sector plays an important role in the application of policies, guidelines and goals for different characteristics of enterprises and industries This research is expected to be a gap for future researchers to access and improve better Eventually, it is necessary to look at the effects of economic volatility during pre and post crisis periods in order to have a clear and concrete view when comparing the results and vulnerabilities that businesses have to bear in order to have strategies and solutions available to anticipate and respond when uncertainty occurs The study expects longer study time and more observations 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Revista Electrónica de Divulgación de la Investigación, Revista de la Universidad del SABES 04 (2012): 2007-3542 57 APPENDICES Appendix 1: Definitions of Variables Variable Description CAPEX/TA Ratio of cash flow from investing activities to the total assets CF/TA Net income before extraordinary items plus depreciation expense, all divided by the total assets GDP growth The percentage increase in GDP from one year to the next Growth potential The percentage increase in sales growth from one year to the next MADUMMY Regarding M&A dummies, set to for value and missing value, and otherwise MU1 – GDP The forecast dispersion for the real GDP MU2 – CPI The forecast dispersion for the CPI National election Election dummy equals for election year, and otherwise Payout ratio The value of dividends and common stock repurchases divided by operating income Tobin’s Q Market to book value of assets Sales growth The percentage increase in sales growth from one year to the next Size Natural logarithm of the total assets Appendix 2: Augmented Dickey – Fuller Unit Root Test for real GDP Dickey-Fuller test for unit root Number of obs = 130 Interpolated Dickey-Fuller Test Statistic Z (t) -17.506 1% Critical 5% Critical 10% Value Value Value -3.500 -2.888 -2.578 Critical MacKinnon approximate p-value for Z(t) = 0.0000 (Source: calculations with Stata 14) Appendix 3: Augmented Dickey – Fuller Unit Root Test for CPI Dickey-Fuller test for unit root Number of obs = 130 Interpolated Dickey-Fuller Test Statistic Z (t) -5.529 1% Critical 5% Critical 10% Value Value Value -3.500 -2.888 -2.578 Critical MacKinnon approximate p-value for Z(t) = 0.0000 (Source: calculations with Stata 14) Appendix 4: MU1 – GDP and MADUMMY regarding growth potential HIGH GROWTH (1) MADUMMY -6.560*** (0.000) LOW GROWTH (2) MADUMMY -5.175* (0.086) TOTAL SAMPLE (3) MADUMMY -7.448*** (0.000) SG 0.00183 (0.918) -0.0457* (0.060) -0.00999 (0.365) L.TOBINSQ -0.0767 (0.171) -0.00949 (0.949) -0.0470 (0.362) CFTA 0.741 (0.146) 0.781 (0.196) 0.681* (0.073) ELECTION 6.977*** (0.000) 5.125 (0.109) 7.968*** (0.000) L.GDPGROWTH 0.741*** (0.000) 0.513 (0.267) 0.674*** (0.000) _cons 0.419 (0.508) 1880 1.468 (0.346) 1882 1.325** (0.010) 3762 L.MU1GDP N p-values in parentheses * p< 0.1, **p< 0.05, ***p< 0.01 (Source: calculations with Stata 14) Appendix 5: MU1 – GDP and MADUMMY regarding financial constraints NFC FC (2) MADUMMY -1.469 (0.230) NFC HIGH PAYOUT RATIO (3) MADUMMY -2.193** (0.011) FC LOW PAYOUT RATIO (4) MADUMMY -9.049*** (0.004) BIG SIZE SMALL SIZE TOTOAL SAMPLE (5) MADUMMY -7.448*** (0.000) (1) MADUMMY -6.385*** (0.000) SG -0.0122 (0.275) 0.0238 (0.667) 0.00291 (0.894) -0.0298 (0.103) -0.00999 (0.365) L.TOBINSQ 0.0354 (0.684) -0.124 (0.105) -0.0116 (0.841) 0.0205 (0.873) -0.0470 (0.362) CFTA 0.963* (0.095) 0.334 (0.528) 0.992* (0.061) 0.309 (0.649) 0.681* (0.073) ELECTION 6.887*** (0.000) 1.607 (0.248) 2.422** (0.013) 9.775*** (0.003) 7.968*** (0.000) L.GDPGROWTH 0.476** (0.029) 0.567*** (0.003) 0.170 (0.110) 0.610* (0.099) 0.674*** (0.000) _cons 1.813** (0.012) 2168 -1.306 (0.334) 1594 1.418*** (0.008) 2734 2.455** (0.025) 1028 1.325** (0.010) 3762 L.MU1GDP N p-values in parentheses * p< 0.1, **p< 0.05, ***p< 0.01 (Source: calculations with Stata 14) Appendix 6: MU2 – CPI and MADUMMY regarding growth potential HIGH GROWTH (1) MADUMMY -0.0374*** (0.000) LOW GROWTH (2) MADUMMY -0.0302* (0.066) TOTAL SAMPLE (3) MADUMMY -0.0602*** (0.000) SG 0.00228 (0.899) -0.0461* (0.059) -0.0100 (0.362) L.TOBINSQ -0.120** (0.028) 0.0333 (0.814) -0.0768 (0.149) CFTA 0.678 (0.175) 0.773 (0.203) 0.658* (0.083) ELECTION -0.258* (0.050) -0.314 (0.155) -0.732*** (0.000) L.GDPGROWTH 0.0291 (0.779) -0.0744 (0.704) 0.431** (0.015) _cons 1.889*** (0.003) 1880 2.442** (0.014) 1882 -0.00164 (0.999) 3762 L.MU2CPI N p-values in parentheses * p< 0.1, **p< 0.05, ***p< 0.01 (Source: calculations with Stata 14) Appendix 7: MU2 – CPI and MADUMMY regarding financial constraints NFC FC (2) MADUMMY -0.0399*** (0.000) NFC HIGH PAYOUT RATIO (3) MADUMMY -0.0438*** (0.000) FC LOW PAYOUT RATIO (4) MADUMMY -0.0537** (0.038) BIG SIZE SMALL SIZE TOTOAL SAMPLE (5) MADUMMY -0.0602*** (0.000) (1) MADUMMY -0.0442*** (0.000) SG -0.0125 (0.259) 0.0199 (0.698) 0.00107 (0.956) -0.0286 (0.119) -0.0100 (0.362) L.TOBINSQ -0.0456 (0.574) -0.147** (0.045) -0.104* (0.090) -0.104 (0.320) -0.0768 (0.149) CFTA 0.919 (0.104) 0.241 (0.642) 1.214** (0.023) 0.242 (0.728) 0.658* (0.083) ELECTION -0.462** (0.015) -0.317* (0.053) -0.327** (0.032) -0.868** (0.020) -0.732*** (0.000) L.GDPGROWTH 0.143 (0.395) -0.0611 (0.597) 0.00593 (0.958) 0.317 (0.364) 0.431** (0.015) _cons 1.356 (0.134) 2168 2.670*** (0.000) 1594 2.143*** (0.001) 2734 0.803 (0.657) 1028 -0.00164 (0.999) 3762 L.MU1GDP N p-values in parentheses * p< 0.1, **p< 0.05, ***p< 0.01 (Source: calculations with Stata 14) ... expand their production and business activities 2.1.4 Impact of macroeconomic uncertainty on corporate investment In this paper, the relationship and effects of macroeconomic uncertainty on the investment. .. objects The object of research is the relationship and the impact of macroeconomic uncertainty on the investment of enterprises in the stock market 1.3.2 Research scopes The research magnitude consists... National election Julio et al (2012) examine the impacts of political uncertainty on the behavior of firms regarding corporate investment in the context of national elections and document that the