Politik Risk ve Firma Yatırımları: Gelişmekte Olan Piyasalarda Bir Araştırma

Abstract

This study aims to examine the effect of political risk on corporate investment in emerging markets between 2001 and 2021. Designed as explanatory and quantitative research, the study employs panel regression analysis with a two-way fixed-effects estimator. The findings indicate a negative effect of political risk on corporate investment, which is more pronounced in countries with high levels of political risk. Additionally, a country-level analysis reveals a negative relationship in China, Mexico, South Africa, and Thailand. In terms of political risk types, risks arising from government actions and violence-related risks adversely affect corporate investments. Sectoral analysis demonstrates a negative relationship in the logistics, manufacturing, retail, and mining sectors. Subgroup analysis based on firm characteristics shows that cash holdings mitigate the adverse effects of political risk, while higher asset tangibility exacerbates the negative impact. The relationship between political risk and corporate investment is also analyzed within the contexts of investment efficiency and financial flexibility. The negative effect of political risk on corporate investment is statistically significant in firms operating below their optimal investment level. Furthermore, firms with financial flexibility are still adversely affected by political risk, despite possessing unused debt capacity.