Proceedings of the 2025 6th International Conference on Management Science and Engineering Management (ICMSEM 2025)

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The Impact of EPU on Corporate Investment in China: Insights for State-Owned Enterprises and the XPCC Enterprises

Authors
Jing Wang1, 2, Yinan Li3, *
1Bingtuan Xingxin Vocational and Technical College, Tiemenguan City, Xinjiang Uygur Autonomous Region, 841007, China
2School of Business and Economics, Universiti Putra Malaysia, 43400, Seri Kembangan, Malaysia
3Xinjiang LvYuan XinRong Trading Co, Tiemenguan City, Xinjiang Uygur Autonomous Region, 841007, China
*Corresponding author. Email: 3527015576@qq.com
Corresponding Author
Yinan Li
Available Online 16 September 2025.
DOI
10.2991/978-94-6463-845-5_52How to use a DOI?
Keywords
Policy Uncertainty; Government Intervention; State-owned Enterprises; Corporate Investment
Abstract

This study investigates how China’s economic policy uncertainty (EPU) affects corporate investment levels, with a focus on ownership heterogeneity. Utilizing the Economic Policy Uncertainty Index and data from 3,307 Chinese A-share firms (2003–2021), we find that heightened EPU significantly suppresses corporate investment. The negative effect is amplified in policy-sensitive enterprises, particularly state-owned entities like the Xinjiang Production and Construction Corps (XPCC) enterprises, which face dual mandates of economic development and social stability. These enterprises’ unique organizational structure and heavy policy reliance make their investments more vulnerable to EPU fluctuations. This results highlight the critical role of government intervention in shaping corporate investment behavior under uncertainty. Policymakers should prioritize clear policy guidance and design compensatory mechanisms for state-owned enterprises (SOEs) to mitigate EPU-induced risks. Additionally, SOEs like XPCC enterprises must strengthen internal risk management systems to navigate policy volatility.

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2025 6th International Conference on Management Science and Engineering Management (ICMSEM 2025)
Series
Atlantis Highlights in Economics, Business and Management
Publication Date
16 September 2025
ISBN
978-94-6463-845-5
ISSN
2667-1271
DOI
10.2991/978-94-6463-845-5_52How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Jing Wang
AU  - Yinan Li
PY  - 2025
DA  - 2025/09/16
TI  - The Impact of EPU on Corporate Investment in China: Insights for State-Owned Enterprises and the XPCC Enterprises
BT  - Proceedings of the 2025 6th International Conference on Management Science and Engineering Management (ICMSEM 2025)
PB  - Atlantis Press
SP  - 506
EP  - 512
SN  - 2667-1271
UR  - https://doi.org/10.2991/978-94-6463-845-5_52
DO  - 10.2991/978-94-6463-845-5_52
ID  - Wang2025
ER  -