The Conversation: Political bickering and policy uncertainty take a toll on business investment, research shows
Partisan squabbling isn’t just annoying – it’s also bad for business.
That’s what my colleagues and I found in a recent study on how uncertainty in environmental policy affects business investment.
First, we analyzed more than 300 million newspaper articles, looking for keywords related to environmental policy uncertainty. We found that this uncertainty spikes around election seasons and has nearly doubled over the past decade.
Then we looked at business investment rates – a common way to gauge a company’s financial health – at companies in affected sectors, such as those in the agriculture, mining, energy and automotive industries. We found that environmental policy uncertainty lowered those companies’ business investment rates by 0.010%.
That might not sound like a lot, but as economists like me know, small sums add up over time.
Read the Center for Energy, Transportation, and Environmental Policy Director Charles Sims’ full article in The Conversation here.