Economic Policy Uncertainty and Firm Value: Impact of Investment Sentiments in Energy and Petroleum

Abstract

This study seeks to determine how economic policy uncertainty (EPU) influences investment decisions and the market value of the Pakistan Stock Exchange. This study examines investment and operational data from 249 energy and petroleum companies between 2015 and 2020 and macroeconomic variables such as EPU. This study investigates the moderating effects of EPU on investments in fixed and intangible assets and its effect on Tobin’s Q and the market price per share. The outcomes demonstrate that EPU reduces the costs of both tangible and intangible assets for businesses. In addition, companies with a higher Tobin’s Q and market price per share are more impacted by uncertain corporate investment policies. However, financial leverage is negatively correlated with share price and positively correlated with earnings per share and earnings per unit. Tobin’s Q positively correlates with financial leverage, indicating that firms that raise capital through debt are more likely to create value for investors. The research indicates that market-dependent enterprises are more susceptible to the unpredictability of monetary policy. According to this study, consistent application and open communication of economic policies are likely to increase the efficacy of company investments, resulting in more effective resource allocation and business decision-making.

Barriers to Financial Inclusion in Indonesia: A Mixed-Methods Study on Low-Income Households

“…While it reaffirmed the importance of education, it also shed light on nuanced challenges related to accessibility and brought to the forefront the less tangible but critical issues of trust and cultural norms. This complex interplay of factors points to the necessity of a holistic approach that addresses the root causes across all dimensions of financial inclusion (Dawood et al, 2019;Hussain et al, 2023). These findings not only corroborate existing literature but also pave the way for future research and policy formulation aimed at overcoming these barriers.…”

Sustainable Built Environment and Its Implications on Real Estate Development: A Comprehensive Analysis

“…In addition, the feasibility of projects and the decisions that investors make regarding investments may be impacted by various factors, including interest rates, the availability of financing, and the government's policies. In addition, the laws and regulations imposed by the government provide challenges and opportunities for expanding the real estate market [48]. Even though laws are intended to protect the environment, ensure people are safe, and maintain the standards for urban planning, these rules may sometimes produce bottlenecks and delays in the bureaucratic process.…”

The moderating effects of the industry competition level and industry diversification on the relationship between the transaction price of mergers and acquisitions and corporate value

“…Tobin's Q is calculated by dividing a firm's market value by its replacement cost and has been widely used in various studies to measure corporate value (Alsmady, 2023;Bhargave & Tandon, 2023). Tobin's Q was calculated in this study by substituting the replacement cost with the book value of assets, following prior research (Hussain et al, 2023).…”