Impacts of Ownership Structure on Systemic Risk of Listed Companies in Vietnam

Vu, Van Thi Thuy; Phan, Nghia Trong; Hung, Dang Ngoc

doi:10.13106/jafeb.2020.vol7.no2.107

Cited by 15 publications

(12 citation statements)

References 19 publications

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“…Results of previous studies show that a capital investment/contribution relationship often goes beyond financial contributions and extends to training, management transfer, and technical cooperation. A number of studies in different countries also show a positive relation between the foreign ownership ratio and financial performance of firms such as Olga ( 2009), Chibber and Majumdar (1999), Douma et al (2006), Vu et al (2019), Nguyen and Dang (2017). In contrast to the above studies, some authors such as Xu and Wang (1999), Lee (2008), Abbas et al (2009), and Nguyen (2018) found no indication that foreign ownership ratio was correlated with financial performance of firms.…”

Section: Foreign Ownership Ratiomentioning

confidence: 98%

“…When studying Vietnamese firms with the main research methods as Pooled OLS, FEM, REM, or GMM, many authors found evidence of the positive correlation between these factors. For example, Vu et al (2019), Nguyen and Dang (2017), Dinh and Ho (2017), Nguyen and Pham (2017) showed that foreign ownership in Vietnam has positive impact on financial performance at the significance level of 1%-5%. This positive correlation was explained by the authors based on the advantages that foreign investors bring to firms.…”

Section: Literature Reviewmentioning

confidence: 99%

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The Impact of Foreign Ownership and Management on Firm Performance in Vietnam

Nguyen¹,

Pham²,

Dao³

et al. 2020

JAFEB

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The human and capital resources from foreign investors are important sources of finance for developing countries. Foreign ownership can help the firm to raise funds for operations and the foreign management can help the firm expand the market and improve management. However, does this really happen to Vietnamese firm? To find the answer to that question, this paper examines the impact of foreign ownership and management on the financial performance of listed firms on Vietnam's stock market. The data collected include 427 listed firms in all fields over five years, from 2014 to 2018. The financial performance is measured by Tobin's Q, ROA and ROE. The study carried out testing of each model by the least squares method of Pool OLS, assessing random effects (REM) and evaluating fixed effects (FEM). The most effective model is the FEM model. The results show that the foreign ownership ratio and the size of the firm have a positive impact on the financial performance. The foreign management, the age of the firms, the liquidity and financial leverage have a negative impact on the financial performance. Based on the research results, the study proposes some recommendations to improve the financial performance of listed firms in Vietnam.

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Section: Foreign Ownership Ratiomentioning

confidence: 98%

Section: Literature Reviewmentioning

confidence: 99%

The Impact of Foreign Ownership and Management on Firm Performance in Vietnam

Nguyen¹,

Pham²,

Dao³

et al. 2020

JAFEB

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“…The concept of corporate Governance has been transformed into the term of corporate management research previous period (2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010). The author suggests that firms need to severely c implement governance, to reduce the agency cost and to increase performance (VU et al, 2020). The author has analyzed the effect of corporate governance on the firm's financial performance (Shahar et al, 2016).…”

Section: Introductionmentioning

confidence: 99%

Corporate Governance and Firm Performance: Evidence From Listed Firms of Pakistan

Ali

Guo²,

Ali

et al. 2021

RISUS

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This study aims to find the influence of corporate governance on firm performance for the listed non-financial firms on the Pakistan Stock Exchange (PSX) for the period 2005-15. The article has measured corporate governance by the large boards with more independent directors, independence of audit committee, ownership concentration, non-existence ofCEOduality, and presence of foreign and institutional investors. To address this endogenous nature of institutional ownership and performance in this study we have used instrumental variables (IV) techniques using a two-stage least square (2SLS) by instrumentalizing institutional ownership with firm size and firm age. The study found that firms with large and independent boards outperform their counterparts. Similarly, the study found that firms having the joint position ofCEOand chairperson performs lower than counterparts. In Pakistan firms with foreign and institutional owners better than others. We found that firms with concentrated owners have a lower level of agency problem and ultimately perform well. Furthermore, we found that firms with a lower level of agency problem type II (measured via ownership concentration contestability) perform better in Pakistan.

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“…For example, Kim and Lu (2011) show that the relation between managerial ownership and firm value depends on the strength of external governance. Aggarwal, Erel, Ferreira and Matos (2011) find that international institution investment improves firm value (see also Vu, Phan and Dang, 2020 on Vietnamese sample). Faccio and Lasfer (1999) find no relations on the U.K. sample and attribute their findings to the fact that U.K. provide stronger outside governance mechanisms than the U.S.…”

Section: Introductionmentioning

confidence: 90%

Revisiting Managerial Ownership and Firm Value in the Absence of Market Forces: Evidence from Singapore and Thailand

Polwitoon

Tawatnuntachai²

2020

JAFEB

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This study examines the effect of managerial ownership on firm value in capital markets where outside governance mechanisms to discipline managers are weak or non-existent. We hypothesize that strong market forces in the U.S. confound the effect of managerial ownership on firm value, i.e., the convergence of interest argument. We test the hypothesis using data from 112 firms from Singapore Stock Exchange and 205 firms from the Stock Exchange of Thailand prior to the Asian financial crisis in 1997 when the market forces were weak, yet the investor protection was sufficient to prevent outright appropriation from management. For ease of comparison, we use methodologies from studies done on the U.S. sample firms during the same study period as ours. We find that, both in Singapore and Thailand, firm value is a function of managerial ownership, and the relation is of the famous inverted U-shaped. Moreover, the relation is robust under different model specifications. The results from Thai sample, with weaker market forces than in Singapore, lend support to many agency cost hypotheses advanced in the U.S. Our results provide useful implication for investors in emerging and frontier markets where outside governance mechanisms are yet to be fully developed.

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Impacts of Ownership Structure on Systemic Risk of Listed Companies in Vietnam

Cited by 15 publications

References 19 publications

The Impact of Foreign Ownership and Management on Firm Performance in Vietnam

The Impact of Foreign Ownership and Management on Firm Performance in Vietnam

Corporate Governance and Firm Performance: Evidence From Listed Firms of Pakistan

Revisiting Managerial Ownership and Firm Value in the Absence of Market Forces: Evidence from Singapore and Thailand

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