Corporate Leverage and Geopolitical Risks: Evidence from Vietnam

This study investigates the impacts of geopolitical risks on corporate leverage decisions of Vietnamese listed firms from 2017 to 2024. The research findings reveal a negative impact of geopolitical risks on both corporate leverage and short-term leverage. That is, Vietnamese listed firms actively reduce corporate leverage and short-term leverage as firms face rising geopolitical risks and uncertainties. Additionally, the effects of geopolitical risks are more pronounced for financially unconstrained firms, HOSE- and HNX-listed firms. Based on the main findings, policymakers at government levels and managers at corporate levels should consider the impacts of geopolitical risks when designing and implementing new policies in order to mitigate the negative effects of these risks and increase the resilience of Vietnamese firms considering geopolitical risks and uncertainties.