Stakeholder theory, risk-taking and firm performance

Abstract

Purpose

This study, using stakeholder approach, aims to examine the impact of corporate governance and risk-taking on the performance of the top 100 nonfinancial listed firms in Vietnam from 2015 to 2019.

Design/methodology/approach

The theoretical and empirical studies are reviewed for rational hypotheses development. Firm performance is represented by return on assets, return on equity and Tobin’s Q.

Findings

Specifically, concentrated ownership structure, large workforce, being a great workplace, quick sales growth, high receivables turnover, being funded by both the state and foreigners and high-risk exposure positively affect firm performance. However, a high level of state ownership or foreign ownership, more independent members on board, large board size and chief executive officer (CEO) duality show an inverse effect. Besides, an inverted U-shaped relationship with firm performance is recognized for liquidity ratios.

Originality/value

This study uses three triangles, including governance, risk, and performance. The paper offers some evidence-based recommendations to improve firm performance in Vietnamese businesses.

Citation

Dao, T.T.B. and Phan, M.C. (2023), "Stakeholder theory, risk-taking and firm performance", Corporate Governance, Vol. 23 No. 7, pp. 1623-1647. https://doi.org/10.1108/CG-09-2022-0366