Quantifying The Impact of Cultural Dimensions on Investment Decisions: Evidence with External Riskmoderation
Keywords:
Cultural Dimensions, Investment Decision-Making, External Risks, International Financial Management, Behavioral Finance, Cross-Border InvestmentAbstract
International financial management has become increasingly complex in an era of globalization, where investment decisions are shaped not only by economic fundamentals but also by deep-rooted cultural dimensions and external risk factors. This study investigates the influence of cultural dimensions on investment decision-making and examines the moderating role of external risks within an international finance context. Grounded in cultural theory and behavioral finance, the research acknowledges that investor behavior, risk perception, capital structure preferences, and strategic financial choices vary significantly across cultural settings. Using an empirical and analytical framework, the study explores how cultural attributes such as uncertainty avoidance, risk tolerance, and long-term orientation shape investment decisions, while external risks include currency volatility, regulatory uncertainty, and macroeconomic instability, moderate this relationship. The research addresses a critical gap in existing literature by integrating cultural and risk-based perspectives into a unified investment decision-making framework. The findings are expected to provide evidence that cultural dimensions exert a significant influence on investment behavior, and that external risks either amplify or weaken this influence depending on market conditions. By highlighting the interaction between culture and uncontrollable external risks, the study contributes to a more nuanced understanding of international investment dynamics. The significance of this research lies in its practical and theoretical implications. For practitioners, it offers insights to design culturally sensitive and risk-aware investment strategies. For policymakers and academics, it provides a structured framework that enhances the understanding of cross-border investment behavior in volatile global markets. Overall, the study underscores the necessity of incorporating cultural intelligence alongside quantitative financial analysis to achieve informed and sustainable investment decisions in the global financial environment.
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