Modeling the Influence of Risk Management Practices on Investment Decision-Making in China's Private Sector

Abstract

This study investigates how risk management practices influence investment decision-making in China’s private sector. As the Chinese economy becomes increasingly privatized and integrated into global markets, the role of corporate risk management in guiding investor behavior is critical. Through a mixed-methods approach combining a survey of 300 investors and interviews with financial analysts, the study models the relationship between strategic risk management frameworks and investors’ trust, risk tolerance, and final investment decisions. Results reveal a significant positive correlation between transparent risk practices and investor confidence, mediated by perceived financial stability and governance quality. The findings provide empirical insights into how private firms in China can enhance their capital inflow by adopting robust risk management protocols.