The Impact of Information Asymmetry on Investment Decisions of Vietnamese Listed Firms

Abstract

This article investigates the impact of asymmetric information on the investment decisions of Vietnamese listed companies covering the period 2011-2021. Using the System Generalized Method of Moments (SGMM) two-steps, results from empirical models show that asymmetric information has a negative impact on investment decisions in Vietnamese enterprises. Moreover, estimated results also show that financial leverage and cash positively influence the investment decisions of Vietnamese enterprises. This is the first study to contribute empirical evidence on the negative impact of asymmetric information on the investment decisions of listed firms in the Vietnamese market - a typical emerging market. In addition, we offer some solutions for corporate managers and suggest implications for policymakers to encourage investment for Vietnamese companies in the heightened context of information asymmetry.