Florida State study links political polarization to higher business uncertainty
New research from Florida State University published in Strategic Management Review finds that America's polarized political system creates greater uncertainty and costs for companies as midterm elections approach.
Research examines corporate challenges
Michael Holmes and Jackson Nickerson co-authored the study to understand how polarization affects business operations. The researchers note that deep partisan divisions make passing legislation more difficult for government bodies. Companies face specific hurdles when they try to engage with this increasingly divided political environment.
Policy shifts raise costs
The study identifies political adjustment costs as a major challenge preventing stable policy transitions between administrations. Greater reliance on executive orders increases the prospect of abrupt policy reversals after elections occur. These instability factors trace back to weakening faith in traditional economic promises for workers.
Timing aligns with elections
The findings were released just before the November 3 midterm elections took place across the United States. Holmes stated that understanding these sources helps keep perspective during the upcoming voting period. The research highlights how political involvement can potentially deepen existing societal divides further.
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