This study
investigates the impact of investment efficiency on firm performance, with a
particular focus on the moderating role of leverage in the context of the Saudi
Stock Exchange. Utilizing a panel dataset comprising 496 firm-year observations
from 62 non-financial listed companies between 2016 and 2023, the analysis
employs fixed-effects models to estimate the relationships. The findings
indicate that investment efficiency positively influences firm performance over
the long term, as firms that invest efficiently in capital tend to achieve
superior performance. Additionally, the results demonstrate that leverage
significantly moderates the relationship between investment efficiency and firm
performance. The study's originality lies in its examination of this moderating
effect within the Saudi market, offering novel insights into capital structure
and performance dynamics in emerging economies. The findings have practical
implications for policymakers, corporate managers, and stakeholders by
providing evidence-based guidance on fostering investment efficiency and
leveraging financial strategies to enhance firm performance.
