TY - JOUR
T1 - Does financial flexibility drive firm's risk‐taking in emerging markets? The moderating role of investment efficiency
AU - Bagh, Tanveer
AU - Khan, Muhammad Asif
AU - Naseer, Mirza Muhammad
AU - Iftikhar, Kainat
PY - 2024/8/2
Y1 - 2024/8/2
N2 - Using a sample of 2301 listed firms from emerging markets for 2014–2023, we examine the effect of financial flexibility (FF) on firm risk-taking (FRT) and how this relationship is moderated by investment efficiency (INVEFF). GMM and bias-corrected method of moments models indicate a positive impact of FF on FRT. Notably, INVEFF emerges as a significant moderator, influencing the FF–FRT relationship. High INVEFF strategically amplifies the effect of FF on FRT. Robustness analysis ensures the stability of study findings. This study contributes valuable insights to the nuanced understanding of the FF–FRT relationship in emerging markets.
AB - Using a sample of 2301 listed firms from emerging markets for 2014–2023, we examine the effect of financial flexibility (FF) on firm risk-taking (FRT) and how this relationship is moderated by investment efficiency (INVEFF). GMM and bias-corrected method of moments models indicate a positive impact of FF on FRT. Notably, INVEFF emerges as a significant moderator, influencing the FF–FRT relationship. High INVEFF strategically amplifies the effect of FF on FRT. Robustness analysis ensures the stability of study findings. This study contributes valuable insights to the nuanced understanding of the FF–FRT relationship in emerging markets.
UR - https://doi.org/10.1002/mde.4337
UR - https://onlinelibrary.wiley.com/doi/10.1002/mde.4337
U2 - 10.1002/mde.4337
DO - 10.1002/mde.4337
M3 - Article
SN - 0143-6570
JO - Managerial and Decision Economics
JF - Managerial and Decision Economics
ER -