<p>The study empirically explores the relationship between bank competition and corporate risk-taking. We use various measures to capture the banking market structure and utilize the volatility of earnings to evaluate firms' risk-taking, based on the data of Vietnam from 2007 to 2022. Our findings suggest that elevated levels of bank competition lead to an increase in firms' risk-taking behavior. Mechanism tests reveal that firms tend to hold more debt with extended maturity in highly competitive banking environments, thereby fostering their risk-taking behavior. We conduct further analysis to examine the heterogeneity effects across various corporate and macroeconomic settings. We document that more substantial risk-taking in response to bank competition is observed for firms with stronger bank–firm relationships, greater earnings opacity, and more investment opportunities. Besides, the effect of bank competition on corporate risk-taking diminishes in times of crises, but becomes more pronounced during periods of expansionary monetary policy. We conduct various robustness checks to validate our findings.</p>