Investment Inefficiency and Geopolitical Risks: Evidence from Vietnam

This study examines the effects of geopolitical risks on the investment efficiency of Vietnamese firms from 2017 to 2024 using fixed effect models and a series of robustness tests. The research findings reveal a negative effect of geopolitical risks on corporate investment efficiency through the channel of information asymmetry. Additionally, the negative effects of geopolitical risks on Vietnamese firms’ investment efficiency are more pronounced for financially constrained firms, underinvested firms, or UPCOM-listed firms. Based on the main findings, both policymakers and corporate managers should consider the geopolitical risks and their impacts when designing new government policies and corporate strategies in order to mitigate the negative effects of these risks on Vietnamese firms.

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Publication Details

Journal
Journal of risk and financial management
Published
2026-01-07
DOI
https://doi.org/10.3390/jrfm19010045
Primary Topic
International Business and FDI
Type
article
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article

Investment Inefficiency and Geopolitical Risks: Evidence from Vietnam

Thinh Tien Bui, Huong Thi Mai Le, Nuong Thi My Le
Journal of risk and financial management
International Business and FDI
article

Investment Inefficiency and Geopolitical Risks: Evidence from Vietnam

Thinh Tien Bui, Huong Thi Mai Le, Nuong Thi My Le
article en

Abstract

This study examines the effects of geopolitical risks on the investment efficiency of Vietnamese firms from 2017 to 2024 using fixed effect models and a series of robustness tests. The research findings reveal a negative effect of geopolitical risks on corporate investment efficiency through the channel of information asymmetry. Additionally, the negative effects of geopolitical risks on Vietnamese firms’ investment efficiency are more pronounced for financially constrained firms, underinvested firms, or UPCOM-listed firms. Based on the main findings, both policymakers and corporate managers should consider the geopolitical risks and their impacts when designing new government policies and corporate strategies in order to mitigate the negative effects of these risks on Vietnamese firms.

Journal of risk and financial managementVol. 19(1)
University of Economics Ho Chi Minh City (VN), Ho Chi Minh City University of Technology (VN)
Openalex Percentile: Top 96%
International Business and FDI
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