CEO’s educational background, economic policy uncertainty and investment-cash flow sensitivity: evidence from India

Abstract

ABSTRACT This study investigates the impact of Economic Policy Uncertainty (EPU) on Investment-Cash Flow Sensitivity (ICFS). Further, this study investigates whether CEO’s educational backgrounds moderate the effect of EPU on ICFS for Indian manufacturing firms from 2005 to 2019. Using the system-GMM, this study finds that EPU increases the role of cash flow for corporate investment and reduces corporate investment. Additionally, CEOs with an educational background in the finance domain (technical area) do (not) moderate the negative impact of EPU on ICFS. The finding of this study suggests that EPU considerably affects ICFS, and CEO’s educational backgrounds moderate the effect of EPU on ICFS. Overall, this study adds new insights into the research fields and the implications of this study are beneficial for economies, firms, managers, and investors.