Economic Policy Uncertainty and Firm Value: The Mediating Role of Intangible Assets and R&D

Abstract

We explore the mechanisms by which intangible assets and R&D intensity mediate the relationship between global economic policy uncertainty and firm value. We find that firms in high intangible-intensity industries and those engaging in R&D suffer the most from restrictive governance policies when economic instability is high. However, when the economic environment is volatile, these same firms benefit the most from prior investments in corporate social responsibility. Results add nuance to prior literature exploring the CSR and corporate governance strictly during the Great Recession and also shed light on optimal governance and CSR policies in times of global economic policy uncertainty.

Keywords: Economic policy uncertainty, firm value, intangible assets, research and development

JEL Classification: G28, G32, G34, G38