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Do firms with state ownership in transitional economies take more risk? Evidence from Vietnam

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  • Vo, Xuan Vinh

Abstract

Firms with government ownership in transitional economies are normally in advantageous position because they have many political and financial privileges. A question which naturally arises is that whether firms with government ownership need to take more risk to maintain competitive edge and obtain innovation. This paper sheds further light on that question by providing an investigation into the impact of government ownership on the firm’s risk-taking behavior in Vietnam, a successful transitional economy. The study uses a number of econometric techniques of panel data estimation for efficient and consistent results. Overall, the paper reports that firms with higher state ownership tend to take less risk-taking activities. This finding has strong policy implications relating to the privatization strategy in transitional economies.

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  • Vo, Xuan Vinh, 2018. "Do firms with state ownership in transitional economies take more risk? Evidence from Vietnam," Research in International Business and Finance, Elsevier, vol. 46(C), pages 251-256.
    • Handle: RePEc:eee:riibaf:v:46:y:2018:i:c:p:251-256
    DOI: 10.1016/j.ribaf.2018.03.002
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    5. Vuong, Giang Thi Huong & Nguyen, Phuc Van & Barky, Walid & Nguyen, Manh Huu, 2024. "Stock return volatility and financial distress: Moderating roles of ownership structure, managerial ability, and financial constraints," International Review of Economics & Finance, Elsevier, vol. 91(C), pages 634-652.
    6. Mai, Nhat Chi, 2020. "Impact of Residual State Ownership on Privatised Firm Performance: Evidence from Vietnamese Listed Firms," OSF Preprints j78fy, Center for Open Science.
    7. Anh Tho To & Quoc Tuan Tran & Thi Siem Tran & Kim Phong Thai & Thi Thu Hong Ho, 2020. "The Monitoring Role Of Non-Executive Directors In Vietnam From A Return-Volatility Perspective," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 65(224), pages 29-52, January –.
    8. Gao, Weiwei & Huang, Zhen & Yang, Ping, 2019. "Political connections, corporate governance and M&A performance: Evidence from Chinese family firms," Research in International Business and Finance, Elsevier, vol. 50(C), pages 38-53.
    9. Choi, Paul Moon Sub & Chung, Chune Young & Vo, Xuan Vinh & Wang, Kainan, 2020. "Are better-governed firms more innovative? Evidence from Korea," International Review of Economics & Finance, Elsevier, vol. 69(C), pages 263-279.
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    12. Tuan Ho & Duc N. Phung & Yen N. Nguyen, 2021. "State ownership and corporate risk‐taking: Empirical evidence in Vietnam," Australian Economic Papers, Wiley Blackwell, vol. 60(3), pages 466-481, September.

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    More about this item

    Keywords

    Risk-taking behavior; Government ownership; Transitional economy; Vietnam;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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