The impact of economic policy uncertainty on the domestic value added rate of construction enterprise exports—evidence from China

Abstract

In the face of a rapidly changing and increasingly complex global environment, rising economic policy uncertainty destabilizes market expectations. This makes construction companies more prudent in export decision-making, as they must navigate risks related to international investments, contract fulfillment, and long-term project management. Investigating how economic policy uncertainty affects these decisions can aid construction companies in refining their international strategies to better withstand policy volatility and devise robust risk management approaches. This research uses data from Chinese industrial and customs manufacturing enterprises, applying econometric models to empirically examine how economic policy uncertainty affects the domestic value-added rate of construction enterprises’ exports and to uncover the mechanisms driving this impact. The study finds that: (1) In general, an increase in economic policy uncertainty can promote the domestic value added rate of construction enterprises’ exports. (2) This promotion effect is stronger for foreign funded construction enterprises, large-scale enterprises, construction enterprises with low value chain status, and construction enterprises with medium high and high technology levels. (3) It suggests that an increase in economic policy uncertainty on exporting construction enterprises. The “forced innovation effect” is significant, which in turn brings about an increase in the domestic value-added rate of construction enterprises’ exports. However, total factor productivity does not play a significant role in the process of the impact of economic policy uncertainty on the construction enterprise export domestic value added rate. This paper is of great significance for enterprises to objectively recognize the “policy dividend” and its accompanying risks implied by economic policy changes.

Keywords

• economic policy uncertainty
• domestic value added rate
• construction enterprise exports
• global value chain
• micro-enterprise