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Abstract
This paper investigates the relationship between firm-specific political uncertainty and corporate risk-taking. Using a large sample of non-financial U.S. firms (2002-2021), the authors find a positive relationship between firm-level political uncertainty and risk-taking, particularly for larger firms. This effect is amplified for firms with higher lobbying spending. The findings are robust to alternative risk measures and endogeneity tests.
Publisher
Humanities and Social Sciences Communications
Published On
Mar 05, 2024
Authors
Lukas Timbate, Dongil Kim, Dereje Asrat, Hwang Sungjun
Tags
political uncertainty
corporate risk-taking
firm-level
lobbying spending
U.S. firms
risk measures
endogeneity tests
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