Research on the Relationship between Corporate Governance and Firm Performance: Empirical Evidence from Companies Listed on the Stock Exchange in Vietnam

Abstract

This study examines the effect of corporate governance on firm performance measure as ROA and Tobin's Q of listed companies in Vietnam. Data samples were collected from 189 companies for Fiscal years 2011 – 2014. Fixed-effects and Random-effects models were estimated to evaluate the impact of corporate governance on firm performance. The study found evidence that some characteristics of corporate governance such as CEO duality, board size and women on board have a negative influence on firm performance as measured by ROA and Tobin's Q. By contrast, independent audit committee members, ownership of governance, ownership of foreign institutional investors and ownership of domestic institutional investors have a positive impact on these two performance measures of firms. The study also revealed a positive impact of ownership of managers on firm performance measured by ROA, however, in the case of Tobin's Q there is no significant correlation.