A Study On The Relationship Between Corporate Governance And Corporate Performance In Vietnam

With the dispersion of globe financial crisis and many financial institutions falling into financial distress, such as the five biggest investment banks in Wall Street and many commercial banks, the market starts to rethink about the origin of this financial crisis.Except for the overage financial innovation and a lot of financial supervision, imperfect corporate governance has been considered as the one of the reasons of this crisis. Although there are many researches about the relationship between corporate governance and corporate performance, there are a few concerns about corporate governance and corporate performance of Viet Nam listed companies, especially empirical studies.This study takes the 221 listed companies in Vietnam during 2010-2013 as the research sample, combining with some theoretical and empirical research literature, applying theoretical, this study analyze correlation between ownership structure, board characteristics, overall corporate governance status and the enterprise performance and the value of the company, established the relationship model of the board of directors, ownership structure, corporate governance index and firms performance, analyze the various variables descriptive statistics. By using Eviews software to validate the research model, the empirical study results and test the model effectiveness. Then, this study provides empirical research results, compares and discusses the world results.On the relationship between ownership structure and corporate performance and corporate value, this study tests the effect of ownership concentration on firm performance and firm value, the analysis results show that, for the Vietnamese listed companies, the biggest shareholder is institutional investors (INSTITUTION) and corporate performance (ROA, ROE) are positively related, the top five shareholders equity summary (TOP5) and corporate performance (ROA),firm value (TOBINQ) are positively related, this shows that, ownership concentration could improve corporate performance, therefore, the concentration of ownership relative to more conducive corporate governance of the Vietnamese listed companies.The relationship between the board characteristics and firm performance and firm value, this study mainly explores the board of directors, the proportion of independent directors, board size, CEO and chairman separately effects on firm performance, the analysis results show that the board size (BOARDSIZE) and corporate performance (ROA, ROE) and firm value (TOBINQ) all have significant positive correlation, the chairman of the board and CEO two occupational separately (DUAL) no correlation with ROA and TOBINQ, but the chairman of the board and CEO two occupational separately and ROE has significant positive correlation. The percentage of independent directors (INDEPENDENT) and corporate performance (ROA, ROE) and the value of the company (TOBINQ) have no significant correlation, it shows the influence of the percentage of independent directors on the performance of Vietnamese listed companies no substantial.Relations between the overall corporate governance status and the firm performance and the value of the company, this study mainly considers the correlation between corporate governance index and corporate performance and corporate value. According to the results of regression analysis, companies with the higher corporate governance index have better performance, and higher firms value.To study the relationship between corporate governance and firm performance from the endogenous perspective, first, pointed out that between the corporate governance and corporate performance to the endogenous theory and empirical evidence, analysis the influence of the existence of endogenous empirical research, points out the research methods to overcome this effect. In consideration of the problems of endogeneity, simultaneous equations model to establish a corporate governance and corporate performance, still use the 221 mixed sample data Vietnam listing Corporation respectively on the simultaneous equation model is estimated by two stage least squares. The conclusion of the study confirmed that the corporate governance and corporate performance relationship existed endogenous problem between the two roles simultaneously.This study compared and analyzed the world studies result and the results of this study for the relationship between ownership structure, board characteristics, corporate governance index and corporate performance and corporate value. Comparison analysis indicates that the results of this study and the results of the world researches most consistent point of view.Finally, summarize the conclusion of the empirical analysis, in the basis of theoretical and empirical research from the international corporate governance standards and other measures are put forward to improve the Vietnamese listed companies governance, countermeasures and proposals to improve the enterprise performance.