Using data on South Korean subsidiaries with 18 different countries of origin and a newspaper-based economic policy uncertainty (EPU) index, we investigate the effect of uncertainty transmission on multinationals’ key decisions. Subsidiaries of multinational corporations face host and home country uncertainty. We document that Korean subsidiaries significantly increase their cash holdings when EPU increases in their home countries, indicating that national uncertainty shocks are transmitted to other countries through multinational networks. We further show a more pronounced home EPU effect when parent companies hold a greater share of subsidiary equity. The home EPU effect is robust to the inclusion of additional home country factors and alternative definitions of home EPU and cash holdings. Additionally, we find that subsidiaries reduce their capital expenditures when their home EPU increases.

我们利用来自 18 个不同国家的韩国子公司的数据以及基于报纸的经济政策不确定性 (EPU) 指数，研究了不确定性传递对跨国公司关键决策的影响。跨国公司的子公司面临东道国和母国的不确定性。我们记录到，当本国的 EPU 增加时，韩国子公司的现金持有量显着增加，这表明国家不确定性冲击通过跨国网络传递到其他国家。我们进一步表明，当母公司持有子公司股权较大份额时，母公司 EPU 效应更为明显。考虑到额外的母国因素以及母国 EPU 和现金持有量的替代定义，母国 EPU 效应非常强劲。此外，我们发现子公司在其母公司 EPU 增加时会减少资本支出。