Corporate Governance and Firm’s Performance: Empirical Evidence from Vietnam
VÕ HỒNG ĐỨC & PHAN BÙI GIA THỦY
This empirical study, the first of its kind, seeks to quantify the relationship between corporate governance and the performance of firms in Vietnam. The authors undertook an intensive review of literature to identify a range of elements that contribute to overall corporate governance. In this study, corporate governance is considered to consist of the following elements: (i) the size of the board; (ii) the presence of female board members; (iii) the duality of the CEO; (iv) the education level of board members; (v) the working experience of the board; (vi) the presence of independent (outside) directors; (vii) the compensation of the board; (viii) the ownership of the board; and (ix) block holders. Employing the Feasible Generalized Least Squares (FGLS) technique on 77 listed firms trading over the period from 2006 to 2011, this study finds that elements of corporate governance such as the presence of female board members, the duality of the CEO, the working experience of board members, and the compensation of board members have positive effects on the performance of firms, as measured by the return on asset (ROA),
while board size produces negative ones. The results also show that ownership of board members has a non-linear relationship with firm?s performance.