What the study found
The study found a statistically significant negative relationship between geopolitical risk, meaning uncertainty linked to international political events, and stock returns in Vietnam. It also found that firms more sensitive to geopolitical risk tend to have higher expected returns.
Why the authors say this matters
The authors suggest that geopolitical uncertainty can erode investor confidence and market performance. They conclude that the findings highlight the importance of including geopolitical risk measures in risk assessment and investment strategies.
What the researchers tested
The researchers analyzed monthly data for all listed companies in Vietnam from January 2010 to December 2023. They used a panel fixed effects model, which controls for unobserved differences across firms, and also ran pooled OLS robustness checks.
What worked and what didn't
The main model showed a significant negative link between geopolitical risk and stock returns. The results also supported the risk-return trade-off: firms with higher geopolitical risk exposure had higher expected returns. The pooled OLS checks were consistent with the main findings.
What to keep in mind
The abstract does not describe detailed limitations beyond the study's focus on Vietnam as an emerging market. The summary provided here is based only on the abstract, so any additional caveats are not available.
Key points
- Geopolitical risk was negatively associated with stock returns in Vietnam.
- Firms with higher geopolitical risk sensitivity had higher expected returns.
- The study used monthly data from all listed Vietnamese companies from 2010 to 2023.
- A panel fixed effects model was the main analysis method.
- Pooled OLS robustness checks supported the main results.
Disclosure
- Research title:
- Geopolitical risk is linked to lower stock returns in Vietnam
- Authors:
- Trần Trọng Huỳnh, Bui Thanh Khoa
- Institutions:
- FPT University, Industrial University of Ho Chi Minh City
- Publication date:
- 2026-02-05
- OpenAlex record:
- View
- Image credit:
- Syced, Wikimedia Commons, CC0
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