Impacts of climate change risks on financial performance of listed firms in agriculture industries in Vietnam

Purpose - Climate change increases systematic risk for firms, especially those in the agricultural industry. Therefore, the need to examine the consequences of climate-related risks on agribusiness companies' financial performance across the globe and emerging markets has risen. In this context, the paper aims to investigate the effects of climate change risks on the financial performance of agriculture listed firms in Vietnam. Design/methodology/approach - The study sample includes 77 Vietnamese listed firms in the agricultural industry in the period of 2015–2019. The authors chose temperature, wind, rainfall and humidity proxies to measure climate change. The OLS regression, random regression and sub-sample analysis have been used to examine the impacts of climate risks on firms' financial performance. Findings - Empirical results show that rain and temperature have positive impacts on financial performance of Vietnamese agriculture listed firms, while wind and humidity have insignificant impacts on financial performance. Research limitations/implications - The research helps researchers, businesses, practitioners and policymakers interested in the agricultural industry, especially those in developing and emerging countries, to develop a deep understanding of the impact of climate change risks on firm performance and therefrom prepare necessary measures to reduce the negative impacts. Originality/value - This study adds to the literature stream on the impacts of climate change on financial performance. It is the first study to investigate this impact in Vietnam, a country which depends mainly on agriculture.