What the study found
The study found a statistically significant negative relationship between geopolitical risk, meaning uncertainty from political or international events, and stock returns in Vietnam. It also found that firms more sensitive to geopolitical risk had higher expected returns.
Why the authors say this matters
The authors conclude that geopolitical uncertainty erodes investor confidence and market performance. They also suggest that geopolitical risk measures should be included in risk assessment and investment strategies.
What the researchers tested
The researchers examined monthly stock data for all listed companies in Vietnam from January 2010 to December 2023. They used a panel fixed effects model as the main approach to account for unobserved differences between firms, and they used pooled OLS as a robustness check.
What worked and what didn't
The main model showed a negative association between geopolitical risk and stock returns. The study also found that firms with higher geopolitical risk beta, meaning greater sensitivity to geopolitical risk, had higher expected returns, consistent with a risk-return trade-off. The pooled OLS robustness check confirmed the stability of the findings.
What to keep in mind
The abstract does not describe specific limitations beyond the study's focus on Vietnam and the 2010-2023 period. The findings are presented for an emerging market context and may not apply beyond that scope.
Key points
- Geopolitical risk was negatively associated with stock returns in Vietnam.
- Firms more sensitive to geopolitical risk had higher expected returns.
- The study used monthly data for all listed Vietnamese companies from January 2010 to December 2023.
- A panel fixed effects model was the main method, with pooled OLS used as a robustness check.
- The authors say the findings support adding geopolitical risk measures to risk assessment and investment strategies.
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
Get the weekly research newsletter
Stay current with peer-reviewed research without reading academic papers — one filtered digest, every Friday.