Understanding Investment Risk Under Uncertainty: a Theoretical Exploration in the Context of Romania and the Republic of Moldova

Abstract

This article explores the concept of uncertainty as a defining dimension of investment risk in Romania and the Republic of Moldova. The study was motivated by the increasing limitations of traditional financial theories that primarily interpret investment risk through measurable statistical indicators, despite the growing complexity of contemporary economic and geopolitical environments. Emerging and transition economies are increasingly exposed to structural instability, institutional fragility, geopolitical tensions, technological transformation, and behavioral volatility, which generate forms of uncertainty that cannot be fully captured through conventional probabilistic models. The paper adopts an interdisciplinary theoretical approach integrating perspectives from financial economics, institutional theory, behavioral finance, complexity economics, and cybernetics. The analysis focuses on conceptualizing uncertainty and examining its principal dimensions within Romania and the Republic of Moldova, including macroeconomic, institutional, geopolitical, behavioral, and technological uncertainty. Attention is given to the structural characteristics of Eastern European transition economies and the ways in which uncertainty influences investor behavior, financial stability, and economic resilience. The findings suggest that uncertainty should be understood not as a temporary disturbance, but as a permanent structural feature of contemporary financial systems. In both Romania and the Republic of Moldova, investment environments are shaped by interconnected economic, political, institutional, and geopolitical factors that alter expectations and market dynamics. The study highlights that adaptive and cybernetic approaches provide more suitable theoretical frameworks for understanding modern financial systems than static equilibrium-based models. Ultimately, the article argues that resilience, adaptability, and institutional flexibility are becoming increasingly important for investment decision-making under conditions of persistent uncertainty. UDC: [339.727.22:330.131.7]:338(478+498); JEL: D81, D84, G11, G32, O16, P52