Revisiting the interconnection between governance mechanisms and firm performance: evidence from Vietnamese listed firms

Abstract

Purpose Corporate governance plays a critical role in solving agency problems. However, previous findings on how governance mechanisms lead to high firm performance are inconclusive. Additionally, this relationship has not been well addressed in the context of transitional countries where governance systems and mechanisms are weak, leaving a gap for research. Hence, this study aims to shed light on the effects of four key governance components, namely, ownership concentration, chief executive officer duality, board size and gender diversity, on firm performance. Design/methodology/approach This study reports on the econometric panel data analysis and fuzzy-set qualitative comparative analysis (fsQCA) of 1,424 firm-year observations from listed companies in Vietnam covering the period of 2010–2017. Findings The econometric panel data analysis confirmed the net effects of single solitary governance components. FsQCA revealed equifinal configurations of components that explain high firm market- and accounting-based performance. Practical implications These findings are relevant for firms in transitional and emerging markets, aiming to adopt the most suitable internal mechanisms to pursue their performance objectives and for regulators interested in enhancing the advantages of the capital market. Originality/value This study provides empirical evidence that firm performance can be improved when the appropriate corporate governance mechanisms are selected. As there are equifinal paths leading to the desired outcome of high performance, firms from different industrial and national contexts should mindfully apply any uniform corporate governance code.

The impact of family ownership on the relationship between the existence of the woman Board of Commissioners and firm performance

“…The presence of women in companies also has a detrimental influence on FP because women are seen as less capable of making difficult decisions (Mínguez-Vera & Martin, 2011). However, the current results do not support those reported by previous studies (Dissanayake et al, 2021;Molinero-Díez et al, 2022;Tran et al, 2022), thus showing that WBoC positively affects FP.…”

“…For example, in Pakistan, WBoC at state-owned enterprises (SOE) was found to have a positive effect on FP (Ullah, Fang & Jebran, 2020). Meanwhile, Tran et al (2022) found that increased gender diversity on boards of companies going public in Vietnam increased FP. There was also a strong relationship between the percentage of female board of commissioners and firm performance (Tleubayev et al, 2020).…”

“…The presence of WBoC serves as a control function (Assenga, Aly & Hussainey, 2018;Lafuente & Vaillant, 2019) and monitoring function (Rahman & Zahid, 2021;Zhou, Owusu-Ansah & Maggina, 2018) to improve firm performance (FP) (Mubarka & Kammerlander, 2022;Ramadan & Hassan, 2022). While empirical research on the influence of WBoC on FP has shown inconclusive results, many studies have shown that the presence of WBoC either has a lower impact on FP (Adams & Ferreira, 2009;Akpan & Amran, 2014;Darmadi, 2013;Fauzi & Locke, 2012;Ghafoor, Duffour, Khan & Khan, 2022;Mubarka & Kammerlander, 2022;Roudaki, 2018) or a positive impact on FP (Dissanayake, Jeyaraj & Nerur, 2021;Mubarka & Kammerlander, 2022;Ramadan & Hassan, 2022;Tran, Nguyen& Wang, 2022). Meanwhile, other studies (Hatane, Winoto, Tarigan & Jie, 2022;Kumar, Nigam & Singh, 2020;Shukeri, Shin & Shaari, 2012;Wang, Abbasi, Babajide & Yekini, 2019) have also shown that the presence of WBoC has no impact on FP.…”

Mulheres nos Conselhos: Revisão sistemática da literatura utilizando o Procnow-C

“…Quando são utilizados os mecanismos apropriados de governança corporativa, o desempenho das organizações pode ser melhorado (Tran et al, 2022). Isso se mostra ainda mais importante quando as empresas estão localizadas em países com fraca proteção legal, uma vez que as práticas de governança corporativa tendem a proteger os investidores de possíveis perdas (Chen et al, 2009).…”

We “like” to value the brand: a mixed-method study

“…By contrast, as a case-based approach, fsQCA emphasizes combinatorial effects (Woodside, 2013). Moreover, drawing on the set theory and complexity theory, fsQCA enables examinations of the asymmetric relationships between conditions and their outcomes (Huarng, 2016; Tran et al , 2022). Afonso et al (2018) explained these asymmetric relations in two terms: equifinality and multifinality.…”