The Impact of Cash Flow on Financial Risk of Listed Companies in Vietnam
Abstract
Vietnamese listed firms face volatile cash flows and financial pressures, which may increase the risk of financial distress. Understanding how cash flow components affect firm stability is critical for managers and policymakers.This study investigates how operating, investing, and financing cash flows influence financial distress, addressing gaps in the Vietnamese context where heterogeneity across firms and tail-risk effects are underexplored.
A sample of 82 firms listed on the Ho Chi Minh Stock Exchange (2020–2024) was analyzed using quantile regression to capture heterogeneous effects of cash flows across different levels of financial risk. Financial risk was measured using Zmijewski’s model, and control variables included firm size and age. Operating cash flow reduces financial distress across quantiles, while financing and investing flows exhibit heterogeneous effects depending on risk levels. Larger firms show higher financial risk. Stable cash flows, especially from operations, are key to mitigating financial distress, providing actionable insights for firm risk management and policy design in emerging markets.
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