Capitalizing on risk: How corporate financial flexibility, investment efficiency, and institutional ownership shape risk-taking dynamics

IF 4.8 2区经济学 Q1 BUSINESS, FINANCE

International Review of Economics & Finance Pub Date : 2025-03-17 DOI:10.1016/j.iref.2025.104068

Tanveer Bagh , Ahmed Imran Hunjra , Collins G. Ntim , Mirza Muhammad Naseer

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引用次数: 0

Abstract

In this study, we test the influence of financial flexibility [FF] on corporate risk-taking [RT], a crucial aspect of firm strategy and performance. In the volatile financial landscape of emerging markets like China, understanding how FF affects risk behavior is essential. Using data from 3571 Chinese listed firms spanning 2014 to 2023, we address this gap by exploring how FF impacts RT and the moderating roles of investment efficiency [INE] and institutional ownership [INO]. Our study employs dynamic panel generalized method of moments [GMM] and a new bias-corrected method of moments to offer robust insights. We find a significant positive correlation between FF and RT. Additionally, IE and INO significantly moderate this relationship, with RT notably amplified when FF exceeds industry- and year-adjusted averages. Interestingly, during exceptional periods, such as the COVID-19 crisis, the impact of FF on RT becomes insignificant. This study offers novel insights into the role of FF, IO and INE in risk management and provides valuable policy recommendations for stakeholders navigating high-risk investments.

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在本研究中，我们检验了财务灵活性（FF）对企业风险承担（RT）的影响，这是企业战略和绩效的一个重要方面。在中国等新兴市场动荡的金融环境中，了解财务灵活性如何影响风险行为至关重要。我们利用 2014 年至 2023 年期间 3571 家中国上市公司的数据，探讨了 FF 如何影响 RT 以及投资效率（INE）和机构所有权（INO）的调节作用，从而填补了这一空白。我们的研究采用了动态面板广义矩方法（GMM）和新的偏差校正矩方法，以提供稳健的见解。我们发现 FF 和 RT 之间存在明显的正相关性。此外，IE 和 INO 显著缓和了这种关系，当 FF 超过行业和年度调整后的平均值时，RT 明显放大。有趣的是，在 COVID-19 危机等特殊时期，FF 对 RT 的影响变得微不足道。这项研究对 FF、IO 和 INE 在风险管理中的作用提出了新的见解，并为利益相关者在进行高风险投资时提供了宝贵的政策建议。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

International Review of Economics & Finance Multiple-

CiteScore

7.30

自引率

2.20%

发文量

253

期刊介绍： The International Review of Economics & Finance (IREF) is a scholarly journal devoted to the publication of high quality theoretical and empirical articles in all areas of international economics, macroeconomics and financial economics. Contributions that facilitate the communications between the real and the financial sectors of the economy are of particular interest.