Recent literature shows that the spike in uncertainty during political elections harms firms’ investment. Bridging insights from international business and political science, we argue that the effect of political elections on firms’ investment activities is contingent on the country’s electoral system. In particular, we expect the negative effect of elections on corporate investment to be smaller for firms operating in plurality systems. We test our theory using a panel dataset of listed firms around the world, and a panel of US multinationals. Our results confirm that during an election period, firms in countries with a plurality system reduce investment less than firms in other countries. Additionally, we show that multinationals’ foreign investment is affected by elections abroad: their investment in a host country declines during an election in that country, though to a lesser extent if the election is held with a plurality system. Collectively, our findings provide new evidence on the role of political institutions for firms’ investment decisions.

最近的文献表明，政治选举期间不确定性的激增会损害企业的投资。从国际商业和政治学的见解中，我们认为政治选举对企业投资活动的影响取决于该国的选举制度。特别是，我们预计选举对公司在多元化系统中运作的公司的负面影响会较小。我们使用全球上市公司的面板数据集和美国跨国公司的面板来检验我们的理论。我们的结果证实，在选举期间，拥有多元化制度的国家的公司减少的投资要少于其他国家的公司。此外，我们表明跨国公司的外国投资受到国外选举的影响：他们在东道国的投资在该国大选期间会下降，但如果采用多党制进行选举的话，在东道国的投资会减少。总的来说，我们的发现为政治机构在企业投资决策中的作用提供了新的证据。