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

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.