Political Uncertainty and Firm Investment: Project-level Evidence from M&A Activity

Zhenhua Chen, Mehmet Cihan, Candace E. Jens, T. Beau Page

Research output: Contribution to journalArticlepeer-review


We study how rms alter investment projects to mitigate exposure to political uncertainty. We examine deal-level merger data and nd that, in addition to delaying and forgoing merger announcements, acquirers: shift merger announcements earlier in time to avoid the period between announcement and effective dates overlapping an election, shift targets geographically away from election states, decrease the size of election-year deals, and shift from equity to cash nancing for election-year deals. These results are stronger for acquirers with tighter nancial constraints and deals more likely to be nanced with equity and show nancing matters to rms' responses to election uncertainty.

Original languageEnglish (US)
JournalJournal of Financial and Quantitative Analysis
StateAccepted/In press - 2022
Externally publishedYes

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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