Environmental Uncertainty And Financial Flexibility:Moderating Effects Of Financial Flexibility

Corporate investment has always been an important factor affecting macroeconomics and microeconomics.From a macro perspective,investment is one of the three main factors that drive macroeconomic growth and plays an important role in economic development.From a micro perspective,investment is one of company's important means to have access to core competitive advantages,rational allocation of resources,and enhancement of corporate value.With the continuous development of the market economy,the ever-changing market environment has significantly affected the investment decisions of companies.Different market environments mean different risks or opportunities.Companies make investment decisions by measuring their own market environment.At the same time,the investment projects of enterprises are often restricted by funds.When making investment decisions,companies must not only consider the risks of the project itself,but also consider the financial risks they face after investing in projects to prevent the capital chain from breaking.In the case of low self-funded reserves and unsmooth financing channels,enterprises have to abandon some projects with investment value and reduce the scale of investment.Given the influence of environmental uncertainty and financial flexibility on corporate investment,studying the relationship between the three is of important significance for understanding macroeconomic development,corporate investment behavior,and enhancing the value of the company.From the perspective of financial flexibility,this paper investigates whether the impact of environmental uncertainty on corporate investment has significant differences among firms with different financial flexibility.This article sorts out the existing research and puts forward basic models and assumptions on this basis.Then through analysis of the data of A-share listed companies in China during 2010-2016,we explore the relationship between environmental uncertainty,financial flexibility,and corporate investment.Based on the results of the study,this paper puts forward some feasible recommendations.The results of the research show that high financial flexibility has negative moderating effects on environmental uncertainty and corporate investment;low financial flexibility has positive moderating effects on environmental uncertainty and corporate investment.This suggests that corporate investment is not determined solely by environmental uncertainty,and financial flexibility has a moderating effect on the relationship between environmental uncertainty and corporate investment.The main innovations of this paper are as follows.Firstly,it proposes the role of financial flexibility in regulating the relationship between environmental uncertainty and corporate investment,and provides new ideas for studying the relationship between environmental uncertainty and corporate investment.Few studies have involved the regulatory role of financial flexibility.Second,empirical studies have verified this regulatory relationship through listed companies,providing evidence for the related research on corporate investment and the rational allocation of resources by companies to improve corporate value through their own financial reserves.Third,through empirical research results,this paper provides targeted recommendations for companies facing environmental uncertainty.