The Impact of Economic Policy Uncertainty on the Efficiency of Corporate Working Capital Management—The Evidence from China

Abstract

As China’s economic development has entered a new era, economic policy regulation has become more and more frequent. While the government transform and restructure the economic development pattern through policy regulation, the uncertainty brought by the policy also has a negative effect on the investment and operation of the private sector. However, working capital management, as an important part of enterprise operation, has received little attention. From the perspective of economic policy uncertainty, this paper uses a sample of the listed non-financial enterprises of Shanghai and Shenzhen stock markets from 2000 to 2010 to study the impact of uncertainty on the efficiency of enterprise working capital management. We found that uncertainty has a negative impact on the efficiency of working capital management.