Power concentration and corporate transparency: Evidence from Vietnam’s pharmaceutical sector

Abstract

This study investigates the impact of managerial power concentration on the level of information transparency among publicly listed pharmaceutical firms in Vietnam during the period 2018 - 2023. Utilizing the Correlated Random Effects (CRE) estimation method and a self-constructed transparency index based on both mandatory and voluntary disclosure frameworks, the analysis reveals that power concentration exerts significant negative effects on corporate transparency. Notably, auditing by Big4 firms plays a moderating role by mitigating the adverse effects of power concentration, whereas concentrated ownership by the board exacerbates the lack of transparency. The study contributes to the literature by deepening the understanding of corporate governance mechanisms in the context of emerging markets and offers policy implications aimed at enhancing disclosure quality and monitoring effectiveness in Vietnam’s capital market.