Overinvestment and firm performance of Vietnamese enterprises

Abstract

The research collects data from 214 non-financial enterprises listed on the Vietnamese stock market over the period from 2012 to 2023. The study measures the extent of overinvestment by listed companies on the Vietnamese stock market and assess its impact on firm performance. The findings indicate that 37.43% of enterprises in Vietnam are overinvesting. Utilizing the static panel data regression method, the results demonstrated consistency with agency theory and prior empirical studies by confirming that overinvestment has a negative impact on firm performance. These findings provide valuable insights for enterprise managers and investors in the market.