Examining the Moderating Effect of Risk Attenuation on the Relationship Between Investor Sentiment and Cash Flow Volatility
Examining the Moderating Effect of Risk Attenuation on the Relationship Between Investor Sentiment and Cash Flow Volatility

Summary/Abstract: This study explores the complex interplay between investor sentiment, cash flow volatility, and the moderating effect of risk attenuation. Analyzing data from 121 active companies listed on the Tehran Stock Exchange over the period from 2010 to 2022, we extracted relevant financial information from the Stock and Securities Organization's database. Through a thorough regression analysis, we gained valuable insights into how these variables interact within the financial sector. Our results indicate that investor sentiment has a significant positive effect on cash flow volatility; as investor sentiment increases, cash flow volatility also rises, highlighting the critical role of investor perceptions in determining a company's financial stability. Furthermore, we investigated the moderating role of risk attenuation and found that it significantly influences the relationship between investor sentiment and cash flow volatility. Specifically, the degree of risk tolerance within an organization can either enhance or diminish the impact of investor sentiment on cash flow, and these effects are statistically significant under certain conditions.

• Details
• Contents