Examining the Moderating Role of Corporate Risk-Taking on the Relationship Between Economic Policy Uncertainty and Managerial Ability in Companies Listed on the Iraq and Saudi Stock Exchanges

Abstract

This study investigates the moderating role of corporate risk-taking on the relationship between economic policy uncertainty and managerial ability in companies listed on the Iraq and Saudi stock exchanges. The findings indicate that economic policy uncertainty has a significant and negative impact on managerial ability in both countries, particularly under volatile economic and political conditions. This effect stems from the reduced efficiency and capability of managers in resource allocation and crisis management. Moreover, corporate risk-taking, as a moderating factor, has been shown to mitigate the adverse effects of economic uncertainty on managerial ability. Firms with higher levels of risk tolerance demonstrate greater flexibility in seizing opportunities amid uncertain conditions. This study holds critical operational implications for both managers and policymakers. Enhancing transparency and the stability of economic policies, along with fostering a culture of risk-taking within firms, can reduce corporate vulnerability and improve managerial performance. The findings also suggest that companies should adopt innovative strategies and risk management practices to cope with economic uncertainty. This research provides a foundational basis for future studies and for formulating managerial policies in financial markets influenced by economic instability.