Political Uncertainty Research Articles

Withdrawal notice to: <’ Political Uncertainty, Corporate Social Responsibility, and Firm Performance ‘><[YBARE(56/6) (2024) / 101467]>

Withdrawal notice to: <’ Political Uncertainty, Corporate Social Responsibility, and Firm Performance ‘><[YBARE(56/6) (2024) / 101467]>

Socialium or the Financial Price of Social Responsibility

We investigate whether investors are willing to pay higher prices to invest in social projects, a differential that we call socialium. Using matching procedures on samples of social and conventional bonds of transnational organisations, we find that, on average, there is no yield and spread differentials on the primary and secondary markets. The result holds after taking into account the impact on market liquidity or shocks linked to political and economic uncertainty addressing silent issues of social risks. The non-significant empirical results on socialium provide us with a rare opportunity to bridge the reasonings stemming from the financial and sociological approaches. We explain why the issuers and investors still bear an interest for the social bonds through the lens of new institutionalism. Social influences, institutional and mimetic pressures and the acquisition of legitimacy in the eyes of society and stakeholders influence the issuance and the acceptance of social bonds.

A Political Instability and Crime Rate in Cross River State. A Qualitative Analysis of Stakeholder’s Perception

This study aims to explore how stakeholders perceive the relationship between political instability and crime rates in Cross River State, Nigeria. A qualitative research design was employed to investigate the influence of political instability on crime and overall insecurity in the region. The study involved a sample of 23 participants representing a broad spectrum of stakeholders, including community members, law enforcement personnel, government officials, civil society groups, and professionals in criminology and political science. Data collection was based on open-ended interview questions designed to capture participants' views, experiences, and observations regarding the link between political instability and crime. To ensure the instrument's validity, expert reviews and pilot testing were conducted. Reliability was strengthened through comprehensive interviewer training, consistent data collection procedures, and the use of techniques such as member checking and triangulation to enhance data credibility and accuracy. The interviews were semi-structured, and thematic analysis was used to interpret the data. The findings revealed a strong perception among participants that political instability directly contributes to increased crime rates in Cross River State. Respondents noted that periods of political unrest or uncertainty are often accompanied by spikes in criminal activity. They also identified several challenges confronting law enforcement and the justice system during such times, including limited resources, diminished institutional efficiency, and heightened corruption within law enforcement and judicial frameworks. The study recommends that policymakers and stakeholders in Cross River State adopt a holistic approach to address the immediate impacts of political instability on crime, while also tackling the deeper socio-economic factors driving these issues. The implications and strategies discussed in the study provide valuable insights for improving crime prevention and governance in the region.

Impact of Indonesia Presidential Election Quick Count on Political Connected Stock Volatility: An Event Study

This study assesses the impact of the 2024 Indonesia Presidential Election quick count results on the stock volatility of politically connected firms listed on the Indonesia Stock Exchange. An event study methodology is employed, analyzing four politically affiliated companies—PMMP, TOBA, BRMS, and WIRG—across a six-day event window (T-3 to T+3). A market-adjusted return model calculated abnormal returns (AR) and cumulative abnormal returns (CAAR). The findings reveal a significant market reaction before the event, particularly on T-2, where the average abnormal return (AAR) peaked at 5.82%, mainly driven by PMMP’s strong return of 16.66%. However, the AAR fell sharply to -3.91% on T+3, indicating a market correction. The cumulative abnormal return (CAAR) reached a high of 6.63% on T-2 before declining to 1.48% on T+3. A T-test yielded a p-value of 0.092 at a 10% significance level, showing a statistically weak significance in pre-and post-event returns. While the quick count results impacted stock performance, the market reaction was moderate. This study provides valuable insights for investors, helping them understand the influence of political uncertainty on politically connected firms in emerging markets and make informed investment decisions.

Сучасний стан та проблеми державного регулювання житлового будівництва в Україні

The military invasion led to a drop in the volume of housing construction and a reduction in the state's ability to influence the state of its development. The suspension of the construction of residential buildings in connection with the reduction of population demand, migration, destruction of infrastructure, constant shelling, and political uncertainty led to the decline of the industry. The problems of state regulation of this area have also deepened due to limitations in the use of available administrative and legal, financial levers and management tools. The lack of organizational and institutional transformations of the management system and minor legislative changes do not ensure the development of a new public management in the residential real estate sector. In the conditions of falling demand for housing and increasing political, economic, and technological risks of developers in the construction of new residential buildings, the state can promote the development of the regulatory and legal framework and carry out further digitalization of construction processes. This will solve a number of regulatory problems (the presence of corruption, fraud, violations of building regulations and requirements), and will ensure the transition to European standards in this area of management. In the conditions of limited state preferential financing and mortgage lending to the population, strengthening the requirements for construction companies to comply with new construction standards will balance the existing imbalances of management activity. The state policy for the development of housing construction in the short term should be aimed at solving the problems of protecting the interests of citizens who purchase housing, as well as the legality, transparency of the activities of construction enterprises, accountability, efficiency of regulation, simplification of the processes of interaction between developers and the state due to the development of electronic services. Further research should be focused on the study of conceptual approaches to the formation of an effective system of state regulation of housing construction

Value Pillars of Russian’ Identity under Conditions of Foreign Challenges

Based on the data of the general sociological survey of the population of the Russian Federation population in February-March 2024, the value foundations of the all-Russian identity are being studied, which are gaining more and more weight in the context of foreign policy pressures and confrontation between Russia and the collective West. Conceptual basis of the study is theoretical approaches to the exploring identity, values and formation processes of a political nation. The study showed that under the influence of the current president’s discourse and concepts enshrined in the leading strategic planning documents on sovereignty, traditional values and moral leadership, as well as thanks to the symbolic support from the Russian Orthodox Church, an all-Russian identity acquires the features of a macropolitical territorial-state identity. Hierarchically, leading values of the all-Russian macropolitical identity involve both conservative and classical liberal values: “faith in Russia” (42%), “common moral values” (38%), “respect for the rule of law and the rights of citizens, economic and political freedoms” (33%).). The conclusion is made that the value of “faith in Russia” due to its wide content format, political uncertainty and reliance on the all-Russian cultural canon allows it to become an ideological source for nation’s consolidation.

Political uncertainty and sovereign bond markets

AbstractWe analyze the effects of political uncertainty on prices and liquidity of sovereign bonds. Specifically, we investigate Italian government bonds during the European sovereign debt crisis and focus on political summits and elections. We find a significant drop in prices in combination with high illiquidity and sell-side pressure before the events. The event returns are significantly positive and followed by a positive price trend. The effects are stronger when uncertainty, as measured by the EPU index, is high and economic conditions are weak. In addition, political uncertainty also affects the primary market and we find significant costs associated with issuing sovereign bonds in highly uncertain times.

Insurance coverage in unstable region: Managing insurance claim risk amid Kashmir's political landscape

This study investigates the impact of prolonged political unrest on insurance claim amounts in Kashmir. It examines the behavior and coverage provided by insurance companies in high-risk areas, focusing on the hazards and perils associated with terrorism and political uncertainty. By analyzing historical data on political violence and terrorism in Kashmir, the study reveals significant patterns and relationships through descriptive statistics. The findings demonstrate that higher levels of political violence and terrorism lead to increased losses for insurers. Moreover, the study underscores the necessity of tailoring insurance coverage to the specific risks in unstable regions. It suggests employing time series analysis for more accurate pricing of insurance policies during periods of political instability. These insights offer practical implications for insurance companies, policymakers, and stakeholders, facilitating more effective risk assessment, pricing, and risk management strategies in volatile areas. In addition to outlining general customer requirements, the study discusses the measures and regulations needed for commercial insurers to provide economical services in such contexts. This comprehensive analysis enhances the understanding of the effects of abnormal situations like prolonged political unrest in Kashmir. Ultimately, the study proposes the integration of time series analysis into insurance pricing models to better navigate periods of political instability.

The nexus between corporate governance, political environments, and firm performance: a comparative study of Ghana and Kenya

Purpose This study aims to examine the effect of political conditions on the relationship between corporate governance and firm performance in two sub-Saharan African (SSA) countries, Ghana and Kenya. Design/methodology/approach This study used a panel data methodology, examining data from a sample of 72 companies (Ghana: 25 and Kenya: 47) from 2018 to 2022. This study used panel quantile regression and the Huber M-estimation robust least squares regression methods. Findings The research reported that larger boards, diversity and ownership concentration do not affect business performance while board independence improves corporate success in both countries. The findings about chief executive officer (CEO) duality were mixed. In Ghana, CEO duality has a positive effect on firm performance, but in Kenya, the study finds that CEO duality hurts firms’ performance. The results found that higher levels of institutional ownership decreased firm performance in both countries. The research found that Ghana’s political environment had a greater impact on corporate governance and business performance nexus than Kenya’s. Research limitations/implications The research is limited to Ghana and Kenya. This study emphasises the necessity for governments in both countries to maintain a stable political environment, implement policies that encourage economic and policy continuity and reduce political uncertainty to improve business conditions. Practical implications This study emphasises the necessity for governments in both countries to maintain a stable political environment, implement policies that encourage economic and policy continuity, and reduce political uncertainty to improve business conditions. Originality/value To the best of the authors’ knowledge, this study is unique because it is the first in SSA to address a research gap by investigating a comparative analysis of the relationship between corporate governance, political environments and firm performance in two distinct countries with different political situations.

Islam, Purity, and Modernity

From the 1930s to the 1950s, the Mzab region in the north of the Algerian Sahara, then under French rule, was shaken by controversies over the consumption and lawfulness of European goods. Historians typically analyze these debates as a form of cultural resistance to colonization or as a sign of the allegedly difficult adaptation of “Islam” to “modernity.” They single out two types of reaction: that of self-proclaimed “reformist” scholars and that of “conservatives,” caricatured as shoring up a barren tradition. Based on the case of the Mzab and on a wide range of Islamic legal documents, this article opens up a new perspective on the relations between Islam, modernity, and colonialism, demonstrating that other logics were also at work. For the Islamic scholars involved, the most important issue at stake was the purity of their community and its preservation in a context of cultural and political uncertainty. Using the tools of Islamic law, both advocates and detractors of these “innovations” shaped a particular vision of their community and its boundaries. By bringing together colonial and Islamic sources, and drawing on both colonial and Islamic studies, this article challenges a reading of the modern history of Islam based on notions such as modernity and reform, which were essentially instrumental in these debates. It also moves away from a historiography that is blind to the internal complexity of these societies, drawing attention to the multiple rationales at work in colonized North Africa.

Talking about strategy: the role of epic plot structures in international contracting

Emerging international markets are frequently characterized by high levels of economic and political uncertainty. Such inherent uncertainties render established ideas of competitive positioning problematic. An alternative perspective is developed which focuses on the day-to-day enactment of strategy through the medium of narrative. Narrative interviews with senior managers from Turkish international contracting firms provide insights into the contested storylines of strategy making. The plot structures mobilized are seen to comprise strategy making “in flight”. Senior managers are further held continuously to test emergent narratives against different audiences for the purposes of enhancing their persuasiveness. The aim is to instil an overall sense of coherence and direction among those with whom they interact. The temporal narratives mobilize epic plot structures from the past for the purposes of ascribing Turkish contractors with heroic identities in their quest for a desirable future. Yet the shared narratives also serve as a means of identity work through which the narrators strive to position themselves within their networks as acknowledged strategy makers. The espoused plot structures are further seen to coalesce to form a narrative infrastructure with direct implications for the future enactment of strategy. The research focus on the essential temporality of strategy narratives has important implications beyond the specific context of enquiry.

Making the state care: the role of political willingness and brokerage in Bogota’s new feminist care policy

This article examines the crucial role of political willingness and brokerage in the implementation of Bogotá's new feminist care policy, the ‘System of Care', which aims to address gender and class inequalities and alleviate care burdens on women. Through a combination of ethnographic data and stakeholder interviews, we analyze the intricate political and social processes that underpin the policy's effectiveness. Drawing on academic literature about care work, policy implementation in weak states, and brokerage, we provide a comprehensive understanding of the policy's development and operation, from the inception of the System of Care to its day-to-day functionality within the local Care Blocks. Our findings underscore the significance of political willingness and brokerage at the macro level, along with the importance of debureaucratization and trust-building at the micro level, as key factors contributing to the policy’s success. Yet, the policy innovation also faces several challenges, primarily political uncertainties and the risk of burnout among local Care Block coordinators.

Decoding the impact of political uncertainty on IPO underpricing in China

PurposePolitical factors play a crucial role in China's initial public offering (IPO) market due to its distinctive institutional context (i.e. “economic decentralization” and “political centralization”). Given the significant level of IPO underpricing in China, we examine the impact of local political uncertainty (measured by prefecture-level city official turnover rate) on IPO underpricing.Design/methodology/approachUsing 2,259 IPOs of A-share listed companies from 2001 to 2019, we employ a structural equation model (SEM) to examine the channel (voluntarily lower the issuance price vs aftermarket trading) through which political uncertainty affects IPO underpricing. We check the robustness of the results using bootstrap tests, adopting alternative proxies for political uncertainty and IPO underpricing and employing subsample analysis.FindingsLocal official turnover-induced political uncertainty increases IPO underpricing by IPO firms voluntarily reducing the issuance price rather than by affecting investor sentiment in aftermarket trading. These relations are stronger in firms with pre-IPO political connections. The effect of political uncertainty on IPO underpricing is also contingent upon the industry and the growth phase of an IPO firm, more pronounced in politically sensitive industries and firms listed on the growth enterprise market board.Originality/valueLocal government officials in China usually have a short tenure and Chinese firms witness significantly severe IPO underpricing. By introducing the SEM model in studying China IPO underpricing, this study identifies the channel through which local government official turnover to political uncertainty on IPO underpricing.

Life quality and social integration of migrants settled in Chile: Venezuelan Narratives

Local economic crisis, violence and permanent political uncertainty, especially in some developing countries, has led to a massive migration of Venezuelans, lately to other countries of South America, looking for better living conditions or mere subsistence. The total number of Venezuelans living in Chile had reached until 2022, 532.715 individuals, representing 32,8% of the migrant population in the country. Since 2014, Venezuelans have arrived in waves with different social, economic and cultural characteristics. This paper presented a qualitative analysis of the effects of selected indicators on the quality of life and social integration of ten Venezuelan migrants in Chile by gender, age and class, as narrated by themselves. Its aim was to explore their socioeconomic and cultural trajectories during settlement in Chile and show how they affected their resilience strategies and social integration. Findings showed a precarious stability in life quality, devaluation of their work and professional status, daily suffering of a variety of maltreatment forms and injustices, most especially, though not only at work. The resilient strategies they have followed involve regrouping among compatriots, certain emotional isolation from nationals, absence of or mild confrontation of ill-treatment, as well as denial of migrant discrimination as a marked social trend.

Between Ballots and Bullets: Political Competition, Uncertainty, and MNE Strategies in Politically Challenging Environments

Multinational enterprises encounter political competition in all of the environments in which they operate, whether it manifests as elections between political parties or war between armed factions – that is, ballots and bullets. Yet, the literature on MNE strategies has yet to fully and systematically incorporate political competition and probe the challenges and opportunities that it poses to firms. In my dissertation research, I delve into three distinct contexts – the Democratic Republic of Congo, the United States, and Russia – to explore political competition and the strategies that MNEs develop to navigate these environments, aiming to build a unified theory to drive new IB scholarship and generate valuable insights for managers.

‘The end of the ‘revolution’ (al-thawra) but not revolutionaries (thuwwār)’*: insights from Syrian fighters

ABSTRACT What drives individuals to join and remain loyal to armed groups amidst the chaos of the Syrian war? This article investigates this question by focusing on the Sham Front, offering a multi-level analysis that integrates external influences, group dynamics, and personal experiences. Based on extensive fieldwork in northern Syria and southern Turkey, including narratives from fighters, commanders, and local leaders, this study reveals how perceived emotional hardships and political uncertainties create distinct revolutionary subjectivities. By considering the macro-level influence of external actors, the meso-level group dynamics, and the micro-level motivations of individual fighters, this article provides a comprehensive understanding of the factors shaping fighters’ behaviour. Incorporating theories of uncertainty-identity and the politics of emotions, the article challenges simplistic narratives, revealing how shared emotional bonds and collective memories sustain loyalty and combat engagement. Unlike many existing studies, this research prioritises the firsthand accounts of fighters, offering a deeper exploration of their motivations. This study bridges significant gaps in existing literature, showcasing how deep-seated emotional and social factors drive the resilience and persistence of fighters in the ongoing conflict.

Unravelling the complex interactions between sentiment of uncertainty and foreign capital flows: Evidence from Brazil and South Korea

Brazil and South Korea have both been known to implement capital controls during emerging market crises to address the complexity of foreign capital flows, which affects international investor behaviour. This research studies Brazil and South Korea bond and stock flows and sentiment of economic and political uncertainty (SEPU), a local news-based sentiment indicator, using a novel time-varying technique. Findings show multiple short-term occasions where increased SEPU strangely boosts equity flows, contrary to the assumption that uncertainty discourages equity investment. This paradoxical discovery is linked to a "behavioural arbitrage strategy" in which risk-seeking investors employ informational asymmetries to capitalize on increased uncertainty. Foreign investors prefer South Korean over Brazilian bonds due to the former country's stronger policy framework. The second significant finding is that equity inflows increase uncertainty (negative domestic sentiment in media) during acute crises. We conclude that inflation, recession, geopolitical risk, financial instability, and tight monetary policy amplify this feedback loop.

Uncertainties of Economic Policy and Government Management Stability Played Important Roles in Increasing Suicides in Japan from 2009 to 2023.

Standardized suicide mortality rates per 100,000 (SMRs) in Japan consistently decreased from 2009 to 2019 but increased from 2020. The causes of these temporal SMR fluctuations remain to be clarified. Therefore, this study was conducted to identify the causalities underlying the recently transformed fluctuations of suicide mortality in Japan. Monthly suicide numbers disaggregated by sex and social standing, and political uncertainty indices, such as economic policy uncertainty (EPU) and government management instability (AENROP), were obtained from Japanese government databases. Interrupted time-series analysis was performed to analyze temporal fluctuations of SMRs disaggregated by sex/social standing associated with the three General Principles of Suicide Prevention Policy (GPSPP) periods and the COVID-19 pandemic. Panel data and vector autoregressive analyses were conducted to investigate causalities from political uncertainties to SMRs. During the first and second GPSPPs (2009-2017), all SMRs disaggregated by sex and social standing decreased, whereas those of unemployed females did not change. During the third GPSPP (2017-2022), decreasing trends in all SMRs were attenuated compared to previous periods. All female SMRs, except unemployed females, showed sharp increases synchronized with the pandemic outbreak. No male SMRs showed sharply increasing at the pandemic outbreak. SMRs of unemployed males/females drastically increased in the later periods of the pandemic, while SMRs of employed and multiple-person/single-person household males did not increase during the pandemic. SMR of unemployed males was positively related to AENROP but not EPU. Other male SMRs were positively related to EPU/AENROP. On the contrary, not all female SMRs were related to EPU/AENROP. Increasing AENROP generally contributed to increasing male SMRs throughout the observation period; however, susceptibility to AENROP and/or political information might have unexpectedly contributed to suppressing the sharply increasing male SMRs induced by large-scale social shocks (the COVID-19 pandemic outbreak) in Japan.

Exploring the impact of industrial environment uncertainty on export sophistication

A favorable industrial environment is important for increasing the sophistication and competitiveness of a country’s exports. However, a country’s industrial environment is bound to change dynamically. Therefore, this study explores the impact of industrial environment uncertainty on export complexity. Through an empirical analysis of panel data from 76 countries from 2010 to 2020, we find that political and social uncertainty significantly inhibits exports, while an uncertain economic environment significantly complicates exports. Moreover, uncertainty in the industrial environment affects high- and middle-income countries more than low-income countries. Furthermore, the analysis of regulatory effects shows that political uncertainty and social uncertainty have a substitution relationship in inhibiting export complexity. This study affirms the impact of industrial environment uncertainty on a country’s export capabilities and provides a reference for countries with different incomes to formulate and modify their industrial environment policies.

R&D investments in knowledge intensive sectors in developing countries and the role of host country political uncertainty

Multinational enterprises (MNEs) persistently navigate environments characterized by political uncertainty. Yet, it is unclear how such uncertainty affects the location and sectoral spread of MNEs' overseas research and development (R&D) investments. This study delves into the influence of political uncertainty on R&D investments within knowledge‐intensive sectors, particularly in developing nations, thus enhancing our understanding of the contextual variables at play. Using a unique data set of MNE greenfield R&D global investment projects over the period 2003–2019, we show that political uncertainty has a negative effect on R&D capital investments. Additionally, we explore sector and host country location‐specific boundary conditions that moderate this relationship and find support for our hypotheses. Our findings show that MNE R&D investments in science‐based sectors (SBS) and knowledge‐intensive business services (KIBS) sectors in developing countries are less susceptible to political uncertainty compared to developed countries. Our results call for more attention from MNEs' managers and policymakers to political developments in their investing countries.