Examining the impact of firm asymmetries on firm risk level in the construction industry from 1983 to 2022

The term uncertainty has received increasing attention in the risk management literature, particularly following the COVID-19 outbreak. K-shaped recovery has become markedly explicit in the wake of the COVID-19 pandemic. Surprisingly, some firms remained considerably robust or even strikingly enhanced their performance following recessions. Fundamentally, there exists a divergent performance of firms akin to the arms of the letter K within same industry. Hence, the overall aim of this study is to investigate the effect of firm asymmetries on firm-level risk during crises/uncertainties. This study was deployed in the construction industry. The results of this study do refute the general consensus of uniform risk impact at the firm level. Along this line, the findings of this study are: (i) larger construction firms are better off coping with uncertainties compared to their smaller peers; (ii) going public diminishes firm-level risk during crises, for publicly traded firms possess the precedence of raising external capital at a lower cost; (iii) Superior financial health cushions the adverse effects of external shocks during uncertainties, particularly lower debt-equity ratio, and higher cash balance; (iv) both geographical and unrelated business diversity appear to undermine firm risk during uncertainties given the greater structural complexity, inefficient resource allocation, and liability of newness and foreignness (v) SOEs are less likely to be vulnerable to external variations through implicit and explicit governmental guarantees. Specifically, Chinese firms are more resilient to crises compared to firms in other countries; (vi) Indulgent organizations imperfectly ward off crises due to overgratification and feeble self-control.