tailieunhanh - Risk attitude and corporate investment under output market uncertainty: Evidence from the mekong river delta, Vietnam

Risk attitude and corporate investment under output market uncertainty: Evidence from the mekong river delta, Vietnam. This paper aims to detect the impact of firm managers’ risk attitude on the relationship between the degree of output market uncertainty and firm investment. | Journal of Economics and Development, , , August 2016, pp. 59-70 ISSN 1859 0020 Risk Attitude and Corporate Investment under Output Market Uncertainty: Evidence from The Mekong River Delta, Vietnam Le Khuong Ninh Can Tho University, Vietnam Email: lekhuongninh@ Le Tan Nghiem Can Tho University, Vietnam Email: letannghiem@ Huynh Huu Tho Can Tho University, Vietnam Email: huynhhuuthoct@ Abstract This paper aims to detect the impact of firm managers’ risk attitude on the relationship between the degree of output market uncertainty and firm investment. The findings show that there is a negative relationship between these two aspects for risk-averse managers while there is a positive relationship for risk-loving ones, since they have different utility functions. Based on the findings, this paper proposes recommendations for firm managers to take into account when making investment decisions and long-term business strategies as well. Keywords: Competition; corruption; investment; market uncertainty; risk attitude. Journal of Economics and Development 59 Vol. 18, , August 2016 1. Introduction structured as follows. Section 1 introduces the paper. Section 2 gives a review of the related literature. Section 3 defines the empirical model out of the literature reviewed. Section 4 discusses the findings using a set of primary data on 667 non-state firms in the MRD. Section 6 concludes the paper and renders recommendations. Investment is crucial to the development of firms since it helps enhance product quality and increase market share. Thus, good investment decisions will raise firms’ efficiency and then trigger economic growth (Maki et al., 2005). However, making right investment decisions is basically difficult, due to the output market uncertainty facing firm managers, among others (., competition and financing constraints). 2. Literature review When making investment decisions, firm managers do face output market .