The moderation role of investment opportunities in modifying the impact of state ownership on corporate risk-taking behavior

Le Quang Minh1, Nguyen Hoang Minh2,
1 Banking University Ho Chi Minh City, Ho Chi Minh City, Vietnam
2 University of Economics and Law, Vietnam National University, Ho Chi Minh City, Vietnam

Main Article Content


This research aims at examining the moderation role of investment opportunities in the effect of state ownership on risk-taking behavior. The financial data of non-financial listed firms in Hanoi and Ho Chi Minh stock exchanges are collected from Bloomberg. The sample includes firm observations during the period from 2015 to 2020 with 2,664 firm-year observations. The paper finds that state ownership negatively affects corporate risk-taking behavior. Investment opportunities are found to moderate the negative impact of state ownership on corporate risktaking activities. The findings are robust by year-fixed effects along with clustered standard errors. Based on these findings, two policy recommendations are provided. First, state-owned firms should improve their corporate governance to deal with agency problems. Second, the government should consider policies to encourage state-owned firms to increase their risktaking behavior.

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