Corporate governance and firm performance in Vietnam: The moderating role of digital transformation


Authors

  • Dinh Phuong Hoa VNU University of Economics and Business
  • Hoang Thi Ngoc Anh VNU University of Economics and Business
  • Nguyen Bich Ha VNU University of Economics and Business
DOI: https://doi.org/10.57110/vnu-jeb.v4i4.330

Keywords:

Board of directors’ characteristics, corporate governance, listed companies, digital transformation, Vietnam

Abstract

This study examines the interplay between corporate governance mechanisms and firm performance in the Vietnamese context, with a particular focus on the moderating role of digital transformation. Utilizing a sample of 150 Vietnamese firms in 2023, the study employs a GMM approach to analyze the relationship between board characteristics (size, independence, duality, gender diversity, meeting frequency, and nationality diversity), digital transformation, and firm performance, proxied by ROA, ROE, and EPS. The findings reveal that board size and CEO duality positively influence firm performance. Notably, the positive impact of gender diversity on performance is amplified by digital transformation. While digital transformation exhibits a standalone positive effect on performance, its moderating role on other governance mechanisms is mixed. These results underscore the importance of effective corporate governance practices, particularly in the context of digital transformation, for enhancing firm performance in the Vietnamese market.

References

Ahmed, H. (2013). Corporate social responsibility disclosures over time: Evidence from Malaysia. Managerial Auditing Journal, 28(7), 647-676. https://doi.org/10.1108/MAJ-07-2012-0729

Akbar, S., Poletti-Hughes, J., El-Faitouri, R., & Shah, S. Z. A. (2016). More on the relationship between corporate governance and firm performance in the UK: Evidence from the application of generalized method of moments estimation. Research in International Business and Finance, 38, 417–429. https://doi.org/10.1016/j.ribaf.2016.03.009

Alchian, A., & Demsetz, H. (1972). Production, information costs, and economic organization. American Economic Review, 62(5), 777-795.

Barako, D. G. (2007). Determinants of voluntary disclosures in Kenyan companies annual reports. African Journal of Business Management, 1(5), 113-128. https://doi.org/10.5897/AJBM.9000203

Bear, S. E., Rahman, N., & Post, C. (2010). The impact of board diversity and gender composition on corporate social responsibility and firm reputation. Journal of Business Ethics, 97(2), 207-221. https://doi.org/10.1007/s10551-010-0505-2

Bebchuk, L. A., & Hamdani, A. (2009). The elusive quest for global governance standards. Harvard Law and Economics Discussion, 643, 12631317.

Bird, B., & Brush, C. (2002). A gendered perspective on organizational creation. Entrepreneurship Theory and Practice, 26(3), 41-65. https://doi.org/10.1177/104225870202600303

Brammer, S., Millington, A., & Rayton, B. (2007). The contribution of corporate social responsibility to organizational commitment. International Journal of Human Resource Management, 18(10), 1701-1719. https://doi.org/10.1080/09585190701570866

Celikyurt, U., Sevilir, M., & Shivdasani, A. (2012). Venture capitalists on boards of mature public firms. Review of Financial Studies, 25(2), 56-101. https://doi.org/10.1093/rfs/hhs096

Chau, G., & Gray, S. J. (2010). Family ownership, board independence and voluntary disclosure: Evidence from Hong Kong. Journal of International Accounting, Auditing and Taxation, 19(2), 93-109. https://doi.org/10.1016/j.intaccaudtax.2010.07.002

Cheng, E. C., & Courtenay, S. M. (2006). Board composition, regulatory regime and voluntary disclosure. The international journal of accounting, 41(3), 262-289. https://doi.org/10.1016/j.intacc.2006.07.001

Chu, C. I., Chatterjee, B., & Brown, A. (2013). The current status of greenhouse gas reporting by Chinese companies: A test of legitimacy theory. Managerial Auditing Journal, 28(2), 114-139. https://doi.org/10.1108/02686901311284531

Dalton, D. R., Daily, C. M., Johnson, J. L., & Ellstrand, A. E. (1999). Number of directors and financial performance: A meta-analysis. The Academy of Management Journal, 42(6), 674-686. https://doi.org/10.5465/256988

Donnelly, R., & Mulcahy, M. (2018). Board structure, ownership, and voluntary disclosure in Ireland. Corporate Governance: An International Review, 16(5), 416-429. https://doi.org/10.1111/j.1467-8683.2008.00692.x

Evans, D. (2010). Aspiring to leadership … a woman’s world? An example of developments in France. Cross Cultural Management: An International Journal, 17(4), 347-367. https://doi.org/10.1108/13527601011086577

Freeman, R. E. (1984). Strategic management: A stakeholder approach. Boston: Pitman.

Gamerschlag, R., Möller, K., & Verbeeten, F. (2011). Determinants of voluntary CSR disclosure: Empirical evidence from German. Review of Managerial Science, 5, 233-262. https://doi.org/10.1007/s11846-010-0052-3

Gao, L. S., & Connors, E. (2011). Corporate environmental performance, disclosure and leverage: An integrated approach. Accounting and Finance Faculty Publication Series, 6.

Giannarakis, G. (2014). The determinants influencing the extent of CSR disclosure. International Journal of Law and Management, 56(5), 393-416. https://doi.org/10.1108/IJLMA-05-2013-0021

Guerrero-Villegas, J., Pérez-Calero, L., Hurtado-González, J. M., & Giráldez-Puig, P. (2018). Board attributes and corporate social responsibility disclosure: A meta-analysis. Sustainability, 10(12), 4806. https://doi.org/10.3390/su10124808

Houle, C. O. (1990). Who should be on your board? Nonprofit World, 8(1).

Inchausti, B. G. (1997). The influence of company characteristics and accounting regulation on information disclosed by Spanish firms. The European Accounting Review, 6(1), 45-68. https://doi.org/10.1080/096381897336863

Jain, T., & Jamali, D. (2016). Looking inside the black box: The effect of corporate governance on corporate social responsibility. Corporate Governance: An International Review, 24(3), 253-273. https://doi.org/10.1111/corg.12154

Jamali, D., Rabbath, M., & Saffiedine, A. (2008). Corporate governance and corporate social responsibility synergies and interrelationships. Corporate Governance: An International Review, 16(5), 443-459. https://doi.org/10.1111/j.1467-8683.2008.00702.x

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360. https://doi.org/10.1016/0304-405X(76)90026-X

Jizi, M. (2017). The influence of board composition on sustainable development disclosure: Board composition and sustainable development disclosure. Business Strategy and the Environment Business Strategy and the Environment, 26(5), 640-655. https://doi.org/10.1002/bse.1943

Kalsie, A., & Shrivastav, S. M. (2016). Analysis of board size and firm performance: Evidence from NSE companies using panel data approach. Indian Journal of Corporate Governance, 9(2), 148-172. https://doi.org/10.1177/0974686216666456

Katmon, N., Mohamad, Z., Norwani, N. M., & Farooque, O. A. (2019). Comprehensive board diversity and quality of corporate social responsibility disclosure: Evidence from an emerging market. Journal of Business Ethics, 157(2), 447-481. https://doi.org/10.1007/s10551-017-3672-6

Kets de Vries, M. F., & Miller, D. (1984). The neurotic organization. San Francisco: Jossey-Bass.

Khan, I., & Şentürk, I. (2019). Board diversity and quality of CSR disclosure: Evidence from Pakistan. Corporate Governance, 21(5), 853-875. https://doi.org/10.1108/CG-12-2018-0371

Matsa, D. A., & Miller, A. R. (2013). A female style in corporate leadership? Evidence from quotas. American Economic Journal: Applied Economics, 5(3), 136-169. https://doi.org/10.1257/app.5.3.136

Love, I. (2010). Corporate governance and performance around the world: What we know and what we don’t. The World Bank Research Observer, 26(1), 42–70. https://doi.org/10.1093/wbro/lkp030.

Montiel, I., & Delgado-Ceballos, J. (2014). Defining and measuring corporate sustainability: Are we there yet? Organization & Environment, 27(2), 113-139. https://doi.org/10.1177/1086026614526413

Vietnamese Government. (2020). Decree No. 155/2020/ND-CP dated December 31, 2020 on elaboration of some Articles of the Law on Securities 155/2020/ND-CP, Elaboration of Some Articles of the Law on Securities.

Nguyen, M. T., Tran, T. T., & Nguyen, P. T. (2019). The level of corporate social responsibility disclosure of Vietnamese commercial banks. Journal of Science and Technology-IUH, 15(5), 70-79.

Downloads

Download data is not yet available.

Downloads

Published

25-08-2024

Abstract View

400

PDF Downloaded

11

How to Cite

Dinh Phuong Hoa, Hoang Thi Ngoc Anh, & Nguyen Bich Ha. (2024). Corporate governance and firm performance in Vietnam: The moderating role of digital transformation . VNU University of Economics and Business, 4(4), 54. https://doi.org/10.57110/vnu-jeb.v4i4.330

Issue

Section

Original Articles