FINANCIAL MANAGEMENT STRATEGIES BASED ON BEHAVIORAL FINANCE TO ENHANCE CORPORATE FINANCIAL PERFORMANCE IN AN ERA OF GLOBAL ECONOMIC UNCERTAINTY

Abstract

This study explores the impact of behavioral finance on corporate financial performance, emphasizing how cognitive biases like overconfidence, loss aversion, and herding behavior influence decision-making during times of economic uncertainty. Through qualitative interviews with CFOs and financial managers, the research identifies key biases affecting investment, risk management, and capital allocation. Findings suggest that companies employing structured decision-making processes and governance mechanisms can mitigate these biases, enhancing financial resilience and adaptability. The study concludes that integrating behavioral finance principles into corporate strategies leads to more rational decisions and improved long-term performance, with recommendations for organizations to invest in behavioral finance training.