Uncertainty avoidance and the relationship between corporate investment and equity market valuation: High-tech vs. non-high-tech firms

초록

The objective of this study is to examine how uncertainty avoidance affects the relationship between corporate investment and equity market valuation. Uncertainty avoidance emerges as a key moderator in shaping the relationship between fixed capital investment and equity market valuation, with statistically significant findings confirmed in the full-sample analysis. This study reveals a nuanced picture of the moderating effect of uncertainty avoidance, with significant influence identified for non-high-tech firms but not for high-tech firms, highlighting the importance of considering sectoral heterogeneity. The observed influence of uncertainty avoidance on the fixed capital investment-equity market valuation association is not mirrored in the context of R&D investment, revealing divergent dynamics in their respective associations with equity market valuation. My results suggest potential managerial implications: high-tech firm managers possess greater agility in navigating equity market dynamics and pursuing investment strategies, even in highly risk-averse environments.

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