The Influence of Macroeconomic and Political Uncertainty on Corporate Risk-Taking: Evidence from Vietnam

This study investigates the impact of macroeconomic uncertainty on corporate risk-taking in Vietnam, an emerging economy with unique institutional characteristics. Using a balanced panel of 190 non-financial listed firms from 2018 to 2022, the analysis combines the World Uncertainty Index for Vietnam (WUIVNM) with a political uncertainty measure capturing leadership changes in the country’s “Four Pillars” system. The results provide consistent evidence that higher macroeconomic uncertainty is associated with lower Z -Scores, indicating greater corporate risk-taking. Leadership transitions in the Four Pillars also have an adverse effect, suggesting that institutional uncertainty influences firm behavior. The impact of macroeconomic uncertainty is more pronounced among high-growth firms, indicating heterogeneous responses across firm types. The findings highlight that the relationship between uncertainty and corporate risk-taking in Vietnam differs from standard predictions and documented evidence in other contexts, underscoring the importance of institutional settings in shaping firm responses to uncertainty.