Political elections and corporate investment: International evidence

Abstract Recent literature shows that the spike in uncertainty during political elections harms firms’ investment. Bridging insights from international business and science, we argue effect of on investment activities is contingent country’s electoral system. In particular, expect negative corporate to be smaller for firms operating plurality systems. We test our theory using a panel dataset listed around world, US multinationals. Our results confirm an election period, countries with system reduce less than other countries. Additionally, show multinationals’ foreign affected by abroad: their host country declines country, though lesser extent if held Collectively, findings provide new evidence role institutions decisions.