Ex-ante risk management and financial stability during the COVID-19 pandemic: a study of Vietnamese firms

What is it about?

We investigate whether firms can ensure their financial stability during Covid-19 crisis by having ex-ante risk management. By studying 279 Vietnamese listed firms, we find that firms which disclose their risk management tool(s) in the 2019 annual reports have better asset utilization and higher liquidity during the Covid-19 period than the others. However, firms that simply express their risk awareness exert no stronger financial stability. In addition, we document that Debt management is the most popular and most effective tool to ensure firms’ financial stability during the crisis. Our study, therefore, highlights the need for ex-ante preparation for future crises.

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