TY - JOUR
T1 - Asset redeployability, sustainability, and managerial prudence
T2 - evidence from economic policy uncertainty
AU - Chatjuthamard, Pattanaporn
AU - Papangkorn, Suwongrat
AU - Jiraporn, Pornsit
AU - Phiromswad, Piyachart
N1 - Publisher Copyright:
© 2023, Emerald Publishing Limited.
PY - 2024/1/19
Y1 - 2024/1/19
N2 - Purpose: The purpose of this study is to shed light on the impact of economic policy uncertainty (EPU) on asset redeployability. Capitalizing on a novel measure of asset redeployability, the authors explore the effect of economic policy uncertainty (EPU) on redeployable assets using a unique text-based measure of EPU. Asset redeployability is an important aspect of sustainability that has been largely overlooked. More redeployable assets can be repurposed for a variety of uses, lessening the necessity for new products and thus conserving natural resources. Design/methodology/approach: In addition to the standard regression analysis, the authors execute a variety of robustness checks, i.e. propensity score matching, entropy balancing, instrumental-variable analysis, GMM dynamic panel data analysis and use Oster’s (2019) approach for testing coefficient stability. Importantly, the authors incorporate firm fixed effects in the analysis, which helps mitigate endogeneity due to unobservable firm characteristics. Findings: Based on an immense sample of over 200,000 observations over three decades, the results reveal that greater uncertainty raises asset redeployability significantly. The findings corroborate the managerial prudence hypothesis. The future deployment of assets is less predictable in times of increased uncertainty. Consequently, during uncertain times, it is more prudent to have assets that can be redeployed for multiple purposes. Originality/value: To the best of the authors’ knowledge, this is the first study to explore the impact of EPU on asset redeployability, which is a critical aspect of sustainability that has rarely been investigated in the literature. The authors fill this important void in the literature. The authors extend the literature in EPU, asset redeployability as well as sustainability.
AB - Purpose: The purpose of this study is to shed light on the impact of economic policy uncertainty (EPU) on asset redeployability. Capitalizing on a novel measure of asset redeployability, the authors explore the effect of economic policy uncertainty (EPU) on redeployable assets using a unique text-based measure of EPU. Asset redeployability is an important aspect of sustainability that has been largely overlooked. More redeployable assets can be repurposed for a variety of uses, lessening the necessity for new products and thus conserving natural resources. Design/methodology/approach: In addition to the standard regression analysis, the authors execute a variety of robustness checks, i.e. propensity score matching, entropy balancing, instrumental-variable analysis, GMM dynamic panel data analysis and use Oster’s (2019) approach for testing coefficient stability. Importantly, the authors incorporate firm fixed effects in the analysis, which helps mitigate endogeneity due to unobservable firm characteristics. Findings: Based on an immense sample of over 200,000 observations over three decades, the results reveal that greater uncertainty raises asset redeployability significantly. The findings corroborate the managerial prudence hypothesis. The future deployment of assets is less predictable in times of increased uncertainty. Consequently, during uncertain times, it is more prudent to have assets that can be redeployed for multiple purposes. Originality/value: To the best of the authors’ knowledge, this is the first study to explore the impact of EPU on asset redeployability, which is a critical aspect of sustainability that has rarely been investigated in the literature. The authors fill this important void in the literature. The authors extend the literature in EPU, asset redeployability as well as sustainability.
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U2 - 10.1108/IJAIM-05-2023-0126
DO - 10.1108/IJAIM-05-2023-0126
M3 - Article
AN - SCOPUS:85179307288
SN - 1834-7649
VL - 32
SP - 100
EP - 121
JO - International Journal of Accounting and Information Management
JF - International Journal of Accounting and Information Management
IS - 1
ER -