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

4 Scopus citations


We study how firms alter investment projects to mitigate exposure to political uncertainty. We examine deal-level merger data and find 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 financing for election-year deals. These results are stronger for acquirers with tighter financial constraints and deals more likely to be financed with equity and show financing matters to firms’ responses to election uncertainty.

Original languageEnglish (US)
Pages (from-to)71-103
Number of pages33
JournalJournal of Financial and Quantitative Analysis
Issue number1
StatePublished - Feb 8 2023
Externally publishedYes

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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