Tác động của quản trị công ty đến hiệu quả doanh nghiệp: Nghiên cứu thực nghiệm từ thị trường chứng khoán Việt Nam

THE IMPACT OF CORPORATE GOVERNANCE MECHANISM 
ON FIRM PERFORMANCE: AN EMPIRICAL EVIDENCE 
FROM VIETNAM STOCK EXCHANGE
TÁC ĐỘNG CỦA QUẢN TRỊ CÔNG TY ĐẾN HIỆU QUẢ 
DOANH NGHIỆP: NGHIÊN CỨU THỰC NGHIỆM TỪ 
THỊ TRƯỜNG CHỨNG KHOÁN VIỆT NAM
TS. Vũ Xuân Thủy
Trường Đại học Thương mại
vuthuy2607@tmu.edu.vn
Abstract
This research paper aims to exemine the impact of the corporate governance mechanism
on firm performance for public companies in Viet Nam. We use unique data on corporate gorver-
nance choices for 263 listed firms in Viet Nam for seven years from 2011 to 2017. We construct
index/sub-indices of corporate governance describing such aspects of corporate gorvernance
as Board of Director’s size, Non-executive directors, ownership arrangements and executive
compensation. Besides, the financial performance is measured by two different methods, which
include return on asset and return on equity. We use a set of instrumental variables coming
mainly from “trust” literature, in particular political diversity, religion and ethnic diversity,
and methods of privatisation, to tackle possible endogeneity. We employ ordinary least squares
(OLS), fixed effects (FEM), random effects (REM) to analyse the governance effects in the frame-
work of standard production function approach. Based on a sample of Vietnamese listed firms
and using panel data regressions, the results show that CEO ownership and Government own-
ership have significant positive impact on the level of total Executive cash compensation. Lack
of control by ownership enables management to extract higher executive compensation. Identity
of owners has a significant influence on the level of executive compensation. Furthermore, this
study investigated the impact of other governance company (such as firm size, board size, non-
executive directors) determinants on the Executive compensation level for Vietnamese listed
firms. In addition, we have found that executive compensation is higher among firms with higher
growth opportunities.
Keywords: Corporate Governance, Firm Performance, Ownership Structure, Emerging
Markets.
Tóm tắt
Nghiên cứu này được thực hiện nhằm mục đích tìm hiểu tác động của cơ chế quản trị công
ty đến hiệu quả doanh nghiệp đối với các công ty đại chúng tại Việt Nam. Bằng việc sử dụng dữ
liệu về cơ chế quản trị công ty của 263 công ty niêm yết tại Việt Nam trong giai đoạn từ 2011 đến
2017, Chúng tôi xây dựng chỉ số phụ về quản trị công ty mô tả ở các khía cạnh khác nhau của
quản trị công ty như: Quy mô Hội đồng quản trị (Board Size), thành viên HĐQT không tham gia
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điều hành (NEDs), cấu trúc sở hữu vốn và bồi hoàn ban điều hành. Bên cạnh đó, hiệu quả doanh
nghiệp được đo lường bằng lợi nhuận trên vốn chủ sở hữu (ROE). Chúng tôi sử dụng phương
pháp hồi quy bình phương nhỏ nhất thông thường (OLS), hiệu ứng tác động cố định (FEM), hiệu
ứng tác động ngẫu nhiên (REM) để phân tích các tác động của quản trị công ty lên hiệu quả
doanh nghiệp. Dựa trên một mẫu các doanh nghiệp niêm yết của Việt Nam và sử dụng hồi quy
dữ liệu bảng, kết quả cho thấy sở hữu CEO, sở hữu Chủ tịch HĐQT và quyền sở hữu của Chính
phủ có tác động tiêu cực đáng kể đến tỷ suất sinh lời trên vốn chủ sở hữu. Ngoài ra, kết quả cũng
chỉ ra rằng Tỷ suất sinh lời đạt mức cao hơn ở những công ty có mức chi trả bồi hoàn cho ban
điều hành cao.
Từ khóa: Quản trị công ty, Hiệu quả hoạt động, Cấu trúc sở hữu, Thị trưởng mới nổi.
1. Introduction
According to Tricker, B. (2015), corporate governance is seen as “the way power is exer-
cised over corporate entities”. It consists of the board activities of the enterprise and its relation-
ships with the shareholders, with the managers as well as with other legitimate stakeholders. The
corporate governance ensures that the corporate “is running in the right direction and being run
well” (Tricker, 2015). It is defined as “the system by which business corporations are directed
and controlled” (Rankin et al,2012). It is widely believed that the implementation of a good cor-
porate governance framework presents companies a structured path to better management prac-
tices, effective oversight and control mechanisms which lead to opportunities for growth,
financing and improved performance (Solomon, 2010).
A basic characteristic of Joint-stock companies is equity being owned by different share-
holders. Accordingly, each type of ownership could has the different impact on firm performance.
Before economic reforms began in 1986, Vietnam’s State-owned Enterprises (SOEs) were solely
state-owned proprietorships directly controlled by industry-specific government agencies. The
SOE reforms decentralized business decision rights from government agencies to firm manage-
ment and expanded enterprise autonomy without a fundamental change in state ownership. All
economic organizations in all sectors were state ... ob.
Cross-section random 50.494457 9 0.0000
Dependent Variable: ROE
Method: Panel Least Squares
Date: 11/11/20 Time: 10:33
Sample: 2010 2016
Periods included: 7
Cross-sections included: 228
Total panel (balanced) observations: 1596
Variable Coefficient Std. Error t-Statistic Prob.
TCOM 0.059310 0.018420 3.219872 0.0013
FSIZE 0.065313 0.023350 2.797167 0.0052
BSIZE -0.005256 0.013840 -0.379795 0.7042
NEDS 0.000286 0.010997 0.025966 0.9793
CEO_OWN -0.002066 0.000851 -2.428171 0.0153
Source: researcher’s caculation from research data
Notes: *, **, *** denote significance at the 1%, 5% and 10% levels, respectively 
Thus, the regression model has the following results:
ROEt = -2.87378 – 0.002066CEO_OWNit - 0.001542GOV_OWNit
+0.00198CHAIR_OWNit
+ 0.05931TCOMit + 0.065313FSIZEit 
5. Results Discussion
Before discussing the results, the study will summarize the expectations for the relationship
between the independent variable and the dependent variable and the results of the study after
estimating the regression model of the factors influencing the firm performanc. The summary re-
sults are presented in Table 7 below:
Table 7: Result regression
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CHAIR_OWN 0.001980 0.000931 2.127028 0.0336
FR_OWN 0.001265 0.001104 1.145775 0.2521
GOV_OWN -0.001542 0.000906 -1.701479 0.0891
GROWTH_MV_BV -0.006475 0.008975 -0.721528 0.4707
C -2.873780 0.686764 -4.184521 0.0000
Effects Specification
Cross-section fixed (dummy variables)
Period fixed (dummy variables)
R-squared 0.274989 Mean dependent var
S.D. dependent var
Akaike info criterion
Schwarz criterion
Hannan-Quinn criter.
Durbin-Watson stat
0.110701
Adjusted R-squared 0.145313 0.267138
S.E. of regression 0.246967 0.180211
Sum squared resid 82.52310 0.998624
Log likelihood 99.19174 0.484153
F-statistic 2.120576 2.349512
Prob(F-statistic) 0.000000
Observative 
variable Expection
Regression 
result Note
TCOM + + Match with expectation
FSIZE + + Match with expectation
BSIZE + 0 No meaning
Source: researcher’s caculation from research data 
The main purpose of this study is to examine the impact of governance mechanism on firm
performance in joint-stock companies listed on centralised securities market in Vietnam.
Based on the above results, after running the regression models with 4 explanatory vari-
ables, there are 5 factors of governance mechanism that impact on the firm performance in joint-
stock companies listed on Ho Chi Minh Stock Exchange (HOSE) and Hanoi (HNX); in which,
there are 4 statistically significant variables (p-value <5%), including: Executive compensation
(TCOM), Firm size (FSIZE), Chair ownership and CEO ownership (CEO_OWN) and 1 variable
are statistically significant (with p-value <10%) is government ownership ratio (GOV_OWN).
The level of explanation of the three groups’ factors is recognized at approximately 25% and this
rate is considered to be not remarkable. However, it is suggested to be understandable as apart
from those mentioned above factors, there are numerous not-yet-to-be-mentioned as well other
qualitative factors that could not be quantified.
The results of the study also showed a different impact on the capital ownership ratio of
different components to the firm performance of listed companies in Vietnam.
- CEO and Chair ownership: The research results show that CEO and Chair ownership
has a negative and significant effect on firm performance with p-value <0.05. That means, the
executive board with a high percentage of ownership often has a deep right to decrease firm per-
formance. It is suggested that the executive board holds a large percentage of shares, the salary
and bonus are also higher, and so incentive for increase firm performance. 
- Government ownership: The results of the regression model show that the Beta coefficient
represents a negative correlation between Government ownership and firm performance (statis-
tically significant with p-value<0.1). This means, companies with higher levels of ownership by
the state will reduce firm performance. Because the key executive managers of these companies
who usually represent state ownership tend to build prudent business plans, which leads to two
issues: (i) The level of bonus payment to managers will tend to be higher than the actual per-
formance of the company; ii) The board of executives could be lack of motivation. 
- Foreign ownership: The research results show that the impact of foreign ownership factors
on firm performance of listed companies is not statistically significant, but the correlation coef-
ficient between these two variables is still positive. 
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NEDs - 0 No meaning
CEO__OWN + - Not Match with expectation
CHAIR__OWN + - Not Match with expectation
FR__OWN - 0 No meaning
GOV__OWN - - Match with expectation
GROWTH + 0 No meaning
- Board Size: The research results show that the impact of foreign ownership factors on
firm performance of listed companies is not statistically significant, but the correlation coefficient
between these two variables is still positive.
- Firm Size: has positive and statistically significant correlation (+) with firm performance.
The study outcomes clarify a positive and significant effect of firm size on firm performance,
which align with the initial expectation. The larger companies, the higher firm performance. This
conclusion is consistent with Baker et al. (1988) and Darmadi (2011) arguments that large com-
panies have more financial resources to hire senior staff for management role and pay higher re-
imbursement. In addition, large companies have complex business models and high level of
diversification so they pay higher salary and bonus to BoE to handle complex tasks that require
advanced skills. Moreover, the process of analysing data in research tables revealed that when
using cross section weights to examine individual conditions of each company, if managers help
increase company size in financial market it seams like there might be an increase in their income.
However, this tendency is not quite clear as it did not happen with all research targets.
- Executive compensation (TCOM) According to Kubo (2001), shareholders do not have
enough information and necessary insight to monitor BoE. Therefore, in order to increase the ef-
fectiveness of monitoring activities; shareholders, which are represented by BoD and Board of
Supervisors should supervise BoE activities and at the same time associate company benefits
(business performance) and BoM benefits (income paid). In addition, the “efficiency-based” pay-
ment model is the focal point of representative theory and thereby forming a correlative relation-
ship between firm performance and income level which helps adjust the benefits between
shareholders and BoE (Jensen, 1993). The research results were supported by representative the-
ory and studies by Barontini and Bozzi (2009), Darmadi (2011).
6. Conclusion
There have been many research conducted concerning firm performance in developed mar-
kets, however, not enough attention has been paid to emerging market like Viet Nam. This paper
is one of the pioneer studies on the relationship between corporate governance and performance
of firms in Vietnam. This research has provided new evidence on the relationship between cor-
porate governance and performance of large private enterprises in Vietnam.
Using a database on all listed companies in the Vietnamese stock market, this study has
evaluated the extent and direction of impact of gorvernance on firm performance in the period
of 2010 - 2016. Furthermore, this study also examined the impact of governance factors and
executive compensation on firm performance in Vietnam. The research result shows that ex-
ecutive compensation tends to increase in large-scale companies and achieve higher financial
performance.
Economic reforms in Vietnam are still an ongoing process. Further decentralizing govern-
ment control appears to be the direction that is likely to occur. Our results suggest that reducing
the direct involvement in firms’ business activities while allowing the government to retain the
ultimate control of SOEs is likely to lead to better firm performance, especially when substituted
with incentive pay schemes. Executive compensation in SOEs has received more stringent public
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scrutiny in recent years. Much of the controversy focuses on the rising level of compensation
and a lack of strong tie to performance. Our study suggests a possible tendency of over-compen-
sation when government ownership is higher. What appears to be important is to strengthen the
tie between pay and performance. When setting compensation policies, the government should
consider its involvement in the firms’ business activities rather than simply issuing a “compen-
sation limit” for all firms.
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