Corporate Governance and Agency Cost: Empirical Evidence from Vietnam

Anh Huu Nguyen, Duong Thuy Doan and Linh Ha Nguyen
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Anh Huu Nguyen: School of Accounting and Auditing, National Economics University, 207 Giai Phong Road, Hanoi 100000, Vietnam
Duong Thuy Doan: School of Accounting and Auditing, National Economics University, 207 Giai Phong Road, Hanoi 100000, Vietnam
Linh Ha Nguyen: School of Accounting and Auditing, National Economics University, 207 Giai Phong Road, Hanoi 100000, Vietnam

JRFM, 2020, vol. 13, issue 5, 1-15

Abstract: This study examines the impact of corporate governance, reflecting a wide spectrum of board characteristics and ownership structure on agency costs in 281 listed companies on Ho Chi Minh Stock Exchange (HOSE) in Vietnam in the period 2013–2018. For this purpose, three board characteristics were chosen: (1) the size of board of directors, (2) equilibrium between non-executive and executive members of the board of directors, (3) the CEO chair duality and three types of ownership structures were chosen: (1) management ownership, (2) government ownership, (3) foreign ownership. An inverse proxy of agency costs is used: asset utilization ratio (asset turnover), which reflects the managerial efficiency. The research methodology includes three statistical approaches: Ordinary least squares (OLS), fixed effects model (FEM) and random effects model (REM) are considered to employ to address econometric issues and to improve the accuracy of the regression coefficients. The results can create effective corporate governance mechanisms in controlling the managerial opportunistic behavior to lower agency conflicts, and hence lower agency costs.

Keywords: corporate governance; agency cost; ownership structure; board characteristics (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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