Economic policy uncertainty, geopolitical risk and corporate outcomes: The role of institutional ownership

The present study examines the moderating role of institutional investors on the relationship between macro uncertainty, corporate social responsibility (CSR), and firm value (FV) by utilizing the annual panel data of the Pakistan Stock Exchange (PSX) covering the period from 2016 to 2022. This study utilized advanced panel econometric techniques, including method of moment quantile regression (MMQR), fixed effect (FE), and feasible generalized least square (FGLS), to analyze the data. The outcomes showed that economic policy uncertainty (EPU) has positive effects on CSR while geopolitical risk (GPR) has negative and insignificant effects on it. Moreover, both EPU and GPR have positive and significant effects on FV. Regarding the moderating role, institutional ownership (IV) has a positive and significant moderating effect on the link between EPU and CSR. However, no significant moderating effect has been shown on the link between macro uncertainty and FV. The findings of Driscoll Kraay's standard errors method robust the outcomes of the main regression models. This study has several policy implications for policymakers, academia and practitioners.