Carbon disclosure and investor decision-making: A systematic review of mechanisms, contexts, and methodological quality

Economic policy uncertainty has a profound impact on firms’ investment decisions, mainly in terms of increased risk and uncertainty for firms when planning future investments. This study aims to explore the impact of corporate economic policy uncertainty on corporate investment, as well as how corporate social responsibility disclosure moderates the relationship between economic policy uncertainty (EPU) and corporate investment. The analysis uses a sample of Chinese listed companies from 2010 to 2022, including 33,791 observations. The study uses ordinary least squares (OLS) regression with clustered standard errors. The basic and robust regression empirical results show that economic policy uncertainty has a negative impact on corporate investment. However, corporate social responsibility plays an important moderating role between them. The two-stage least squares method (2SLS) is used to solve the endogeneity problem of reverse causation. The heterogeneity results show that economic policy uncertainty significantly dampens business investment, while corporate social responsibility (CSR) is effective in mitigating this negative effect, especially among non-state-owned and low-cash-flow firms, where this moderating effect is more pronounced. The study concludes that as corporate social responsibility disclosure enhances information transparency and investor confidence, companies should prioritize CSR programs that ultimately help companies remain competitive and attractive to investors in volatile markets. Meanwhile, this also highlights the strategic importance of CSR in mitigating external risks, such as those presented through volatile economic policies.

Trust is a fundamental element in financial interactions, particularly in the advisory sector, influencing investment decisions and overall client satisfaction. This study aims to explore the impact of trust-building strategies on investment decisions through the financial advisor-client relationship. The research employs a structured questionnaire to gather data on trust-building strategies, the advisor-client relationship, and investment decisions. The study found that trust-building strategies, such as transparency and competence demonstration, positively influenced investor decisions. Specifically, 78% of investors reported increased confidence in their investment choices after engaging with advisors who prioritized transparency and expertise. Moreover, 85% of investors indicated a preference for advisors who demonstrated reliability and ethical conduct, leading to a stronger advisor-client relationship. The findings underscore the importance of trust in financial advisory services and suggest that enhancing trust through transparent practices can lead to more informed and collaborative decision-making processes. The study emphasizes the evolving nature of investment decision-making and proposes integrating technological innovations like AI and robo-advisors. The study provides valuable insights for financial institutions to invest in advisor training and guidance, benefiting all stakeholders involved.

The Nepalese stock market has experienced substantial transformations in recent years. Research on investors’ herding behavior is of paramount importance since it explores the influence of collective choices made by investors, which could result in intensified market price fluctuations. This study examined the influence of behavioral biases on investment decisions among Nepalese investors – general individuals who actively participate in the country’s stock market, considering overconfidence, representative, anchoring, regret aversion, and herding biases as explanatory variables, with investment decisions as the response variable. The study employed a linear regression model, establishing relationships using a structured questionnaire with 379 observations. The study revealed the significant influence of overconfidence, anchoring, and regret aversion biases on investment decisions among Nepalese investors. Conversely, the influence of representative bias had a little impact on investment choices, and herding behavior showed no significant relationship with investment decisions. Hence, it suggests that behavioral biases have a greater impact on individual investment choices in the Nepalese financial market. It is essential for investors, advisers, and policymakers to be aware of and address these biases to make well-informed decisions, maintain financial stability, and foster market development.