Essays on The Impact of Economic Policy Uncertainty in Australia

Le, Cao Hoang Anh

Essays on The Impact of Economic Policy Uncertainty in Australia

Le, Cao Hoang Anh

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Publication Type:: Thesis
Issue Date:: 2023

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Field	Value	Language
dc.contributor.author	Le, Cao Hoang Anh
dc.date.accessioned	2023-07-14T02:14:09Z
dc.date.available	2023-07-14T02:14:09Z
dc.date.issued	2023
dc.identifier.uri	http://hdl.handle.net/10453/171501
dc.description	University of Technology Sydney. Faculty of Business.	en_US.UTF-8
dc.description.abstract	This thesis consists of three stand-alone yet interconnected essays investigating the consequences of uncertainty surrounding government economic policies in Australia at the aggregate and firm level. Using Australian data, the thesis first examines the link between economic policy uncertainty (EPU) and capital investment and then considers the potential spillover effect of external, foreign shocks on the Australian economy. The results indicate that domestic EPU has a persistent and negative effect (up to four years) on investment decisions made by Australian Securities Exchange (ASX) listed firms. In addition, there is robust evidence that foreign EPU sources exert a strong incremental effect on Australian capital investment and economic growth. Finally, the thesis considers the extent to which EPU affects sell-side financial analysts’ earnings forecasts for ASX listed firms. The results suggest that forecast errors and forecast dispersion significantly increase in the presence of heightened policy uncertainty. Overall, the thesis goes beyond the traditional focus on autarkic economies like the United States to consider the dynamics of the EPU effect in Australia, as a relatively small and open economy. By doing so, it contributes to the emerging literature on policy uncertainty, corporate investment policies and agents’ economic behaviors. The findings have important practical implications and provide insights for financial analysts, investors, corporate managers and policy makers into the joint effect of local and foreign EPU on firm-level decisions and the mitigation of possible adverse impacts.	en_US.UTF-8
dc.format	Thesis (PhD)
dc.language.iso	en_US	en_US.UTF-8
dc.relation	https://opus.lib.uts.edu.au/bitstream/10453/171501/1/thesis.pdf
dc.rights	info:eu-repo/semantics/openAccess
dc.rights	The author owns the copyright in this thesis including all reproduction and reuse rights for the work. The work may not be altered without the permission of the copyright owner. Attribution is essential when quoting or paraphrasing from this thesis.
dc.rights	© 2023 Cao Hoang Anh Le
dc.rights	au.edu.uts.lib/cph
dc.title	Essays on The Impact of Economic Policy Uncertainty in Australia	en_US.UTF-8
dc.type	Thesis
utslib.copyright.status	open_access	*

Abstract:

This thesis consists of three stand-alone yet interconnected essays investigating the consequences of uncertainty surrounding government economic policies in Australia at the aggregate and firm level. Using Australian data, the thesis first examines the link between economic policy uncertainty (EPU) and capital investment and then considers the potential spillover effect of external, foreign shocks on the Australian economy. The results indicate that domestic EPU has a persistent and negative effect (up to four years) on investment decisions made by Australian Securities Exchange (ASX) listed firms. In addition, there is robust evidence that foreign EPU sources exert a strong incremental effect on Australian capital investment and economic growth. Finally, the thesis considers the extent to which EPU affects sell-side financial analysts’ earnings forecasts for ASX listed firms. The results suggest that forecast errors and forecast dispersion significantly increase in the presence of heightened policy uncertainty. Overall, the thesis goes beyond the traditional focus on autarkic economies like the United States to consider the dynamics of the EPU effect in Australia, as a relatively small and open economy. By doing so, it contributes to the emerging literature on policy uncertainty, corporate investment policies and agents’ economic behaviors. The findings have important practical implications and provide insights for financial analysts, investors, corporate managers and policy makers into the joint effect of local and foreign EPU on firm-level decisions and the mitigation of possible adverse impacts.

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http://hdl.handle.net/10453/171501