What is it about?
This article scrutinizes the influence of foreign ownership on corporate risk-taking for 461 listed companies in Vietnam between 2012 and 2016. A regression method is employed for assessing whether a threshold influences foreign ownership interests. The findings show that foreign in-vestment promotes corporate risk-taking up to a certain point; once past this threshold, there is little significant influence on foreign investment. The findings imply that a minimum level of foreign ownership is needed in order to have a significant effect on corporate risk-taking in Vietnam.
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Why is it important?
Vietnam deserves research attention, and the empirical evidence we provide based on new and original data is likely to provide additional insights into the existing empirical literature on the FO-RT relationship.
Perspectives
This research could be valuable for policymakers in Vietnam because there is a plan (Article 32 of Draft Law) to end the 49% limit on foreign ownership for listed companies. This research suggests that doing this could improve corporate risk taking and ultimately company performance .
Dr Krishna Reddy
Toi Ohomai Institute of Technology
Read the Original
This page is a summary of: Foreign ownership and corporate risk-taking: Panel threshold evidence from a transactional economy, Finance Research Letters, June 2021, Elsevier,
DOI: 10.1016/j.frl.2021.102190.
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