How uncertainty avoidance affects firms investments after a crisis
The relationship between uncertainty avoidance and private investments is found negative after a crisis by Inklaar and Yang (2012). This thesis has further analyzed through which channels uncertainty avoidance affects the private investments. First, the relationship between uncertainty avoidance and firm size distribution and the level of internationalization is examined on the country level. Secondly, the interaction between uncertainty avoidance and firm size/internationalization on investments is analyzed on the firm level. Results indicate that uncertainty avoidance negatively affects the firm size distribution in a country. Uncertainty avoidance weakens the positive relationship between firm size and investments. On the other hand, uncertainty avoidance strengthens the relationship between internationalized firms and investments. This indicates that uncertainty avoidance does affect the private investments of a country by its moderating effect on the relationship between firm size and investments.
Faculteit der Managementwetenschappen