Corporate governance, ownership and firm performance in Vietnam

Abstract

The US shareholder corporate governance system has become the “apparent endpoint”
of corporate governance evolution, and many countries have sought to replicate this
success (Gilson, 2001). Nevertheless, little is known whether the so-called “best practice”
governance model also applies to emerging (transition) countries, where the stakeholder
model dominates, where concentrated state ownership and family control is ubiquitous,
and where institutions differ significantly from those in developed countries. In addition,
the evidence of a significantly positive association between corporate governance and firm
performance prevails in developed economies (Bebchuk et al., 2009; Brown & Caylor,
2004, 2006; Cremers & Nair, 2005; Gompers et al., 2001). However, the results from such
studies in emerging countries are not conclusive, and mixed in transition countries. The
literature shows an abundance of studies on the influence of country characteristics on the
effectiveness of corporate governance on firm performance. Less attention is paid on how
the presence of controlling shareholders and state-controlled shareholders influence the
relationship between corporate governance practices and firm performance, particularly in
transition economies. This article as a part of my doctoral thesis provides some potential
avenues for future research on the association between corporate governance practices and
firm performance in the context of highly concentrated ownership in emerging (transition)
economies, including in Vietnam.