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Navigating uncertainty and performance: How financial decision-making bridges the gap

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  • Hunjra, Ahmed Imran

Abstract

This study examines how uncertainty affects corporate financial performance, focusing on the mediating roles of capital budgeting and working capital management. Using survey data from chief financial officers and structural equation modelling, we find that uncertainty weakens capital budgeting effectiveness and constrains working capital, both of which reduce financial performance. The findings emphasise the need to integrate uncertainty into investment planning and liquidity management, enabling firms to strengthen resilience in volatile environments.

Suggested Citation

  • Hunjra, Ahmed Imran, 2026. "Navigating uncertainty and performance: How financial decision-making bridges the gap," Finance Research Letters, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:finlet:v:89:y:2026:i:c:s1544612325024559
    DOI: 10.1016/j.frl.2025.109206
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