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Political Uncertainty and Finance: A Survey
Author(s) -
Dai Lili,
Zhang Bohui
Publication year - 2019
Publication title -
asia‐pacific journal of financial studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.375
H-Index - 15
eISSN - 2041-6156
pISSN - 2041-9945
DOI - 10.1111/ajfs.12257
Subject(s) - politics , intermediary , financial intermediary , asset (computer security) , economics , financial market , finance , survey data collection , financial economics , business , political science , statistics , computer security , mathematics , computer science , law
An emerging stream of literature investigates the impact of political uncertainty on financial markets. In this survey, we review this line of literature from four perspectives, namely, asset prices, corporate policies, financial intermediaries, and economy and households, suggesting that political uncertainty generally increases market friction and as a result changes corporate behavior and adversely affects the economy. At the end of the survey, we discuss a few future directions worth being explored in view of the relationship between political uncertainty and finance.