Do corporate development expectations enhance cross-regional capital flows

Under growing uncertainty, micro-market entities’ development expectations significantly influence investment, particularly non-local investment, affecting both corporate expansion and cross-regional capital flows in unified market development. Using 2010-2023 A-share listed company data, this study investigates how corporate expectations shape non-local investment decisions. Results indicate that positive development expectations substantially boost non-local investment through three mechanisms: improving debt financing, increasing risk-taking, and strengthening managerial incentives. Heterogeneity analysis reveals stronger effects in firms operating in higher marketization levels, higher tax intensity, greater foreign direct investment, and non-state-owned enterprises. Furthermore, optimistic expectations improve investment efficiency by reducing under-investment and elevate enterprise value. This research offers policy insights for optimizing the business environment for corporate investment, stabilizing corporate expectations, and optimizing cross-regional capital allocation.