The performance and corporate risk-taking of firms: evidence from Malaysian agricultural firms

Abstract

Purpose

This study explores the effects of the performance and corporate risk-taking behaviour of agricultural firms. Despite its importance in mitigating climate change, the agricultural sector also faces global competition, market liberalisation, rapid technological advances and the starter of stricter quality and safety procedures, all of which require firms to take greater risks.

Design/methodology/approach

This study explores this relationship by applying generalised least square (GLS), random effect methodologies (REM) and generalised method of moments (GMM).

Findings

The findings report a favourable relationship between firm performance and corporate risk-taking using a sample of firms from an emerging market.

Research limitations/implications

The effects of these results for management practice and recommendations for further research were examined.

Originality/value

While this empirical study used a sample focused on a single industry, most previous studies focused on multiple industries. The originality of this study is its analysis of how firm performance affects corporate risk-taking in the Malaysian agriculture sector.

Citation

Ahmad, H.H. and Azhari, A. (2022), "The performance and corporate risk-taking of firms: evidence from Malaysian agricultural firms", Journal of Agribusiness in Developing and Emerging Economies, Vol. 12 No. 5, pp. 791-808. https://doi.org/10.1108/JADEE-11-2020-0267