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This paper explores how a firm that is established in an environment characterized by uncertainty can engage with weak regulative institutions by developing operational and institutional capabilities.

We employ a multiple case study approach with seven leading multinational firms in Brazil in industries that vary in industry concentration.

Firms choose among alternative strategies for engaging with regulative institutions as an ongoing process, based on their assessment of four characteristics of the uncertainty they face and their capabilities. Strategies that require a firm to exert greater effort to adapt to institutions or influence institutions have a greater potential to catalyze for developing operational capabilities. Although firms in industries with different concentrations behave similarly in individually adapting to regulative institutions, firms in decentralized industries are more likely to collaborate to influence institutions, which enables them to both access public agents through network partners and better negotiate their own interests.

This research guides managers in developing institutional engagement strategies to reduce the potential consequences of institutional uncertainty in their supply chain. It also suggests types of institutional capability aligned with decentralized vs concentrated industries.

We extend the construct of institutional engagement strategies from the context of entrance to a new international market to an ongoing process in firms that are established in an environment characterized by weak regulative institutions. We also examine the role of industry concentration in the application of institutional engagement strategies.

Taking advantage of distinctive text-based measures of climate policy uncertainty and firm-specific exposure to climate change, this study aims to examine the impact of firm-specific vulnerability on dividend policy.

To mitigate endogeneity, the authors apply an instrumental-variable analysis based on climate policy uncertainty as well as use additional analysis using propensity score matching and entropy balancing.

The authors show that an increase in climate policy uncertainty exacerbates firm-specific exposure considerably. Exploiting climate policy uncertainty to generate exogenous variation in firm-specific exposure, the authors demonstrate that companies more susceptible to climate change are significantly less likely to pay dividends and those that do pay dividends pay significantly smaller dividends. For instance, a rise in firm-specific exposure by one standard deviation weakens the propensity to pay dividends by 5.11%. Climate policy uncertainty originates at the national level, beyond the control of individual firms and is thus plausibly exogenous, making endogeneity less likely.

To the best of the authors’ knowledge, this study is the first attempt in the literature to investigate the effect of firm-specific exposure on dividend policy using a rigorous empirical framework that is less vulnerable to endogeneity and is more likely to show a causal influence, rather than a mere correlation.

This paper aims to investigate empirically the impact of economic policy uncertainty (EPU) on small-to-medium enterprises’ (SMEs) investment efficiency and whether product market competition influences this association.

The study was conducted on French SMEs listed on the “CAC Mid & Small” Index over 2008–2021. This paper proposes a quantitative approach to test the relationship between the EPU and SME investment efficiency.

These findings show that EPU significantly alleviates SMEs’ investment inefficiency, reflected in the reduction of overinvestment and underinvestment. As EPU increases, firms with more exposure to such uncertainty invest more efficiently, and their overinvestment tendency becomes lower, while reducing the risk of underinvestment. These results are still significant after a series of robustness checks. Further analysis shows that EPU mitigates investment inefficiency to a greater extent for firms operating in highly competitive industries, and better information environments.

This study was limited to the French EPU index and could be extended to a European or even international scale. Moreover, using alternative uncertainty indexes across various European countries can be more advantageous in further studies. Although results suggest that EPU affects investment efficiency, future studies could further explore the mechanisms through which EPU affects SMEs’ investment efficiency and, in particular, across different industries. Understanding these variations due to the specific industry-EPU sensitivity can provide valuable insights. Finally, it would be interesting to examine the risk management strategies adopted by SMEs in the face of EPU, combined with other growing risks, such as climate risk.

In the face of high EPU, SME managers must improve risk management, adopt appropriate investment strategies, consider using predictive analytics or economic forecasting tools and embrace technology and innovation that enhance agility and responsiveness to policy uncertainty. Besides, political decision-makers should adapt their regulatory policies (tax, labor, housing, etc.) to preserve the efficiency of SME investment.

Although the debates on how policy uncertainty affects the investment and financing of large businesses have received a great concern of academia, to the best of the authors’ knowledge, this is the first study that focuses on the effect of EPU on investment distortions for SMEs.

High economic policy uncertainty forces firms to accumulate a higher level of cash than during normal business periods. However, it is not evident that economic policy uncertainty has a homogeneous impact across cash-holding distributions. This paper aims to study the impact of economic policy uncertainty, leverage and their interaction on cash-holding distributions.

This study adopted a quantile regression approach to examine the influence of economic policy uncertainty and firm leverage on firm-level cash-holding distributions. To investigate the influence across quantiles, the author estimated 19 quantiles between 0.05 and 0.95.

This study finds that both economic policy uncertainty and firm leverage significantly affect firm-level cash-holding distributions heterogeneously. But, the impact of the interaction of these two variables is significant only for firms placed in the 60th to 85th quantiles of cash holding distribution.

The study adds to the existing knowledge of determinants of firm-level cash holdings but takes exogenous variables as economic policy uncertainty. The paper builds on a unique sample setting wherein, the cash holdings of all nonfinancial firms have increased many folds, including housing companies in an emerging economy.

This paper aims to examine how a firm’s exposure to economic policy uncertainty affects the auditors’ perceptions of financial reporting risk. Firms that are more sensitive to policy uncertainty are predicted to engage in more earnings management because these firms are more likely to experience greater uncertainty in future operations. Audit fees will reflect this reporting risk. On the other hand, auditors might feel more fee pressure from policy-sensitive firms because firms are more inclined to reduce spending in the face of uncertainty and subsequently charge lower fees.

The author tests my hypothesis using U.S. data on audit fees and client characteristics of public companies between the years 2001 and 2021. The author estimates a standard audit fee model based on the audit fee literature (Hay et al., 2006) while also including the two policy sensitivity measures. This study uses panel data methods that allow time-series analyses, providing a powerful setting to test dynamic audit fee adjustment to improve the understanding of the audit market.

The results suggest that audit fee is higher for policy-sensitive firms than for policy-neutral firms. These results are robust to various proxies of policy sensitivity and various specifications designed to mitigate the endogeneity concerns. The study provides assurance that on average, auditor pricing reflects client risk adequately, mitigating the concern that auditors give in to fee pressure and compromise audit quality as a result.

While the findings from this study should be of value to regulators and academics seeking to understand audit activities amid escalating macroeconomic uncertainty, when interpreting these results, several limitations must be considered. The study does not examine how external auditors evaluate risks tied to policy uncertainty. A comprehensive understanding of how and why external auditors respond to heightened policy uncertainty faced by firms could be better achieved through interviews with external auditors and audit committee members. In addition, while this study posits that auditors adjust their approach in response to changes in policy uncertainty, largely due to potential shifts in the risks of material misstatement, there might be additional factors at play that warrant higher audit fees post a change in policy uncertainty. For instance, specific policy changes may give rise to new risks or modify existing ones, thereby precipitating increased scrutiny of records and procedures as company directors’ demand. These aspects offer potential avenues for future research.

This study underscores the significant role of policy sensitivity in determining audit fees and audit quality. Policy-sensitive firms present unique complexities and potential risks that require additional effort and vigilance from auditors. Auditors must develop a specialized understanding of sectors prone to policy fluctuations to navigate these unique challenges effectively. In addition, the role of professional standards boards and regulators in establishing guidelines for auditing policy-sensitive firms cannot be understated. Such guidelines could lead to more consistent audit practices and improved audit quality. Finally, by recognizing and effectively responding to the policy sensitivity of client firms, audit firms can mitigate their own risks, strengthen public trust and enhance the reliability of financial reports.

First, this study adds to an emerging stream of auditing literature that focuses on how audit fees interact with a firm’s external environment by providing evidence of an unexplored implication, a firm-specific policy sensitivity. Second, my main construct, policy sensitivity, provides two distinct advantages over other variables used in prior studies that explore the relationship between audit fees and external firm environments. Third, this study answers the calls for research by De Villiers et al. (2013, p. 3), who identified the cost behavior of audit fees, especially over time, as an area not well understood.

Prior research has emphasised the importance of the early phases of construction projects, as well as the difficulties of procuring engineering services – especially due to the uncertainties. Despite that, studies on the public procurement of engineering services are scarce. Although scholars have shown that uncertainty may affect the choice of control modes, the level of uncertainty that characterises services is not addressed by the two task characteristics: knowledge of the transformation process and output measurability. The purpose is to investigate organisational control in public procurement of engineering services.

The existing control model was adjusted in this study by conceptually adding uncertainty as a third aspect to the two task characteristics. A single case study of the Swedish Transport Administration was used. The empirical data, comprising 14 interviews with managers from the client and engineering consulting companies, were analysed using flexible pattern matching and visual mapping approaches and then illustrated using the model.

The public client did not base its choice of control modes on uncertainty, but rather on the other two task characteristics. Consequently, the service providers argued that the chosen control modes reduced their creativity, increased their financial risks and caused unclear responsibilities. This study therefore shows that uncertainty is an important factor to consider in the choice of control modes, both from a theoretical perspective and from the service providers' point of view. The developed model may therefore be useful for researchers as well as practitioners.

This study is the first attempt to add uncertainty as a task characteristic when choosing control modes. The results contribute to the scarce control literature regarding the procurement of engineering services for construction projects and the procurement of other services with high uncertainty.

This review identifies low self-concept clarity (SCC) as a source of consumer vulnerabilities and explains how the uncertainty associated with low SCC leads to processes that result in materialistic behaviors and overspending, product dissatisfaction, and potential self-harm. Processes include uncertainty reduction efforts through symbolic self-completion and social comparison, responses to everyday self-concept threats that result in feelings of deficiency and reduced consumption constraints, and susceptibility to interpersonal and marketer influences. In addition, the negative association between SCC and materialism is explained, risk factors for low SCC are described, and the need for research to help low SCC consumers deal with their vulnerabilities is explored.

The COVID-19 outbreak has been accompanied by a massive “infodemic”, characterized by an overabundance of information, both accurate and inaccurate, making it hard for people to find trustworthy sources and reliable guidance. This study aims to investigate how the COVID-19 infodemic (i.e. information overload and untrustworthiness) influences consumers’ emotions (i.e. fear, anxiety and hope) by shaping their cognitive appraisals of the pandemic (i.e. perceived risk and uncertainty). Additionally, this study also investigates how individual differences (i.e. COVID-19 involvement and infection experience) impact their emotion formation process.

Data were collected from 815 US consumers aged between 18 and 65 in November 2021 via an online survey. Structural equation modeling and multi-group comparison from AMOS 23 were used to test the proposed relationships.

Information overload increased one’s perceived risk and perceived uncertainty of COVID-19, which, in turn, structured the emotional states of fear, anxiety and hope. Information untrustworthiness had a significant impact on risk perception, which led to an increased feeling of fear. Additionally, individuals’ COVID-19 involvement and their infection experience with the coronavirus were found to moderate the cognitive appraisal process in developing emotions.

This study offers insights into the relationships between the information landscape and cognitive appraisals regarding health crises, specifically the COVID-19 pandemic. Not only enriching emotional well-being literature, it also lends managerial implications for effective communication strategies in global health emergencies.

The peer review history for this article is available at: https://publons.com/publon/10.1108/OIR-12-2023-0616

The purpose of this paper is to investigate the relationship between culture and entrepreneurial orientation (EO) in informal enterprises and the moderating role of their survival intent.

This paper used Hofstede's national culture framework and theory of EO to develop a novel conceptual framework. The data were collected using a survey from a sample of 385 informal enterprises and analyzed using partial least square structural equation modelling.

The findings of this paper confirmed that power distance, uncertainty avoidance and normative orientation negatively affect EO in contrast with the positive effect of individualism and masculinity. Although power distance and uncertainty avoidance negatively affect an EO, the findings showed that survival intent weakens the negative nexus between these variables and strengthens the positive effect of individualism and masculinity on EO.

Although this study examined how survival intent moderates the nexus between national culture and EO across informal enterprises in emerging economies, the data were collected in Nigeria only. This study also examined EO in aggregate and considered only one sector.

This study recommends that policymakers and practitioners understand the important links between firms' characteristics, culture and EO while designing training programs, policies and procedures. Doing so will support the successful implementation of entrepreneurship programs, address the prevailing entrepreneurial needs and cultural deficits across enterprises and promote the efficient allocation of resources.

This paper extends Hofstede's framework of national culture and EO in the context of informal enterprises in emerging economies by examining the nexus between national culture and EO, moderated by survival intent.

This survey explores the application of real options theory to the field of health economics. The integration of options theory offers a valuable framework to address these challenges, providing insights into healthcare investments, policy analysis and patient care pathways.

This research employs the real options theory, a financial concept, to delve into health economics challenges. Through a systematic approach, three distinct models rooted in this theory are crafted and analyzed. Firstly, the study examines the value of investing in emerging health technology, factoring in future advantages, associated costs and unpredictability. The second model is patient-centric, evaluating the choice between immediate treatment switch and waiting for more clarity, while also weighing the associated risks. Lastly, the research assesses pandemic-related government policies, emphasizing the importance of delaying decisions in the face of uncertainties, thereby promoting data-driven policymaking.

Three different real options models are presented in this study to illustrate their applicability and value in aiding decision-makers. (1) The first evaluates investments in new technology, analyzing future benefits, discount rates and benefit volatility to determine investment value. (2) In the second model, a patient has the option of switching treatments now or waiting for more information before optimally switching treatments. However, waiting has its risks, such as disease progression. By modeling the potential benefits and risks of both options, and factoring in the time value, this model aids doctors and patients in making informed decisions based on a quantified assessment of potential outcomes. (3) The third model concerns pandemic policy: governments can end or prolong lockdowns. While awaiting more data on the virus might lead to economic and societal strain, the model emphasizes the economic value of deferring decisions under uncertainty.

This research provides a quantified perspective on various decisions in healthcare, from investments in new technology to treatment choices for patients to government decisions regarding pandemics. By applying real options theory, stakeholders can make more evidence-driven decisions.

Decisions about patient care pathways and pandemic policies have direct societal implications. For instance, choices regarding the prolongation or ending of lockdowns can lead to economic and societal strain.

The originality of this study lies in its application of real options theory, a concept from finance, to the realm of health economics, offering novel insights and analytical tools for decision-makers in the healthcare sector.