Incentives for financial risk management in Vietnamese enterprises: a study on their determinants

Abstract

This study aims to assess the factors affecting the incentives for financial risk management in Vietnamese enterprises. By employing multivariable binary logistic regression, the author examines the relationship between hedging decisions for firms’ financial risks and their determinants, namely financial distress costs, tax, agency cost of debt, capital-market imperfections and growth opportunity, hedge substitutes, level of managerial utility, level of government influence, and size of firms. The results demonstrate that hedging decisions for financial risks have a positive correlation with costs of financial distress and managerial utility, and a negative correlation with government influence. These findings are agreeable to empirical results of previous researches that work out on the same case.