Agency Problems, Equity Ownership, and Corporate Diversification

We examine the effect of ownership structure on firm performance, for firms listed on Vietnamese stock exchanges, using 2744 firm-year observations over the period from 2007 to 2012. We find a non-linear relationship between ownership structure and firm performance. State ownership has a convex relationship with firm performance. This paper finds that firm performance increases beyond 28.67 percent level of state ownership. Foreign ownership has a concave relationship with firm performance. We find that firm performance increases with an increase of foreign ownership up to a level of 43 percent and then decreases. Policy makers should encourage foreign ownership and widely dispersed state ownership in firms, which can help improve firm performance.

https://papers.ssrn.com/sol3/Delivery.cfm/AEPA_AEPA12056.pdf?abstractid=2753309&mirid=1&type=2

Ownership Structure and Firm Performance: Evidence from Vietnamese Listed Firms

Corporate Diversification and Shareholder Value: A Survey of Recent Literature

This paper analyzes the evolution of the main theories regarding the capital structure and the related impact on risk and corporate performance. The capital structure is a dynamic process that changes over time, depending on the variables that influence the overall evolution of the economy, a particular sector, or a company. It may also change depending on the company’s forecasts of its expected profitability, capital structure being, in fact, a risk–return compromise. This study contributes to the literature by investigating the drivers of capital structure of the firms from the Romanian market. For the econometric analysis, we applied multivariate fixed-effects regressions, as well as dynamic panel-data estimations (two-step system generalized method of moments, GMM) on a panel comprising the companies listed on the Bucharest Stock Exchange. The analyzed period, 2000–2016, covers a cycle with significant changes in the Romanian economy. Our results showed that leverage is positively correlated with the size of the company and the share price volatility. On the other hand, the debt structure has a different impact on corporate performance, whether this calculated on accounting measures or seen as market share price evolution.

https://www.mdpi.com/2227-7072/6/2/41/pdf

The Impact of Capital Structure on Risk and Firm Performance: Empirical Evidence for the Bucharest Stock Exchange Listed Companies

The paper tries to examine the impact of capital structure on the financial firm performance of industrial companies in Turkey. the annual financial statements of 136 industrial companies listed on Istanbul Stock Exchange (ISE) were used for this study which covers a period of 8 years from 2005-20012. A multivariate regression analysis is applied to test the relationship between capital structure and firm performance. To measure firm performance used indicators such as Return on Asset (ROA), Return on Equity (ROE) and Earning per Share (EPS) as well as Debt Ratio (DR) as capital structure variable. The results show that there is a negative significant relationship between capital structure and firm performance.

/pdf/the-impact-of-capital-structure-on-financial-performance-of-2z4hauk2gf.pdf

The Impact of Capital Structure on Financial Performance of the Firms:Evidence From Borsa Istanbul

Capital structure and firm performance: Empirical evidence from a small transition country

This paper examines the relationships among foreign ownership, capital structure, and firm value in the case of listed firms in Vietnam. Using fixed effect model on data of all listed companies (exclude financial firms and banks) in Hochiminh Stock Exchange during the period of 2008-2011, the research finds an interesting evidence that foreign ownership has negative impact on firm value while previous literature indicates controversal results. The result implies that foreign ownership in Vietnam is not concentrated and therefore it cannot play an monitoring role in corporate governance mechanism. The outcome also shows that there is a negative link between foreign ownership and capital structure due to the fact that foreign investors suffer from information asymmetric and increase debt for controlling agency problem. With regard to relationship between capital structure and firm value, increase in debt leverage of listed firms decrease firm value. Hence, traditional theories of capital structure should be adjusted while applying them in emerging markets. Apart of fixed effect method, simultaneous equations model is employed for controlling simultaneity problem.

Foreign Ownership, Capital Structure and Firm Value: Empirical Evidence from Vietnamese Listed Firms

(ProQuest: ... denotes formulae omitted.)IntroductionIn Vietnam, ownership structure is a major issue of most firms. In the past, most firms were state-owned enterprises that relied on the government for sources of finance. However, with the mid-1980's economic reform, a number of firms were privatized and there has been a dramatic growth in new firms with diverse ownership structures, including private, foreign and joint-stock companies. In addition, the establishment of Ho Chi Minh Stock Exchange in 2000 is also an important part of economic development in Vietnam. Particularly, market capitalization value increased significantly, from only US$154 mn in 2003 to US$20.385 bn in 2010. With the growth of the stock exchange, there was a change in the ownership structure of corporations in Vietnam.1 Foreign ownership gradually became an essential part of ownership structure in both non-listed and listed firms due to the boom in foreign investment inflow. However, there is no research using a detailed dataset to examine the link among foreign ownership, capital structure and firm performance in Vietnam.Research till date has focused on diversified aspects of ownership structure. In recent literature, ownership structure appears as an important factor that affects the firm performance and capital structure as well. However, theoretical arguments still cannot indicate explicitly these relations and empirical evidence shows mixed results (Morck et al., 1988; and Margaritis and Psillaki, 2010). Studies on the relationship between ownership structure and firm performance often consider the managerial ownership, large shareholders' ownership, and the concentration (or dispersion) of ownership structure. However, there is not much empirical evidence about the influence of foreign ownership on capital structure and firm performance. Meanwhile, foreign ownership has become common and plays an important role in emerging economies due to the sharp increase in foreign investment. With regard to relationship between ownership structure and capital structure, there are few studies that examine the relationship between ownership structure and capital structure (Margaritis and Psillaki, 2010; and Ruan et ai, 2011). In detail, studies that link ownership structure to capital structure only attempt to identify the determinants of capital structure. It is necessary to deeply investigate the connections between ownership structure and capital structure, especially in emerging economies.Besides, after the economic reforms in 1986, Vietnam became an emerging market and occupies a considerable position in emerging countries as well as in the world economy. Indeed, Vietnam is one of the nations that has a high economic growth rate among the developing Asian countries (IMF, 2010).2 Moreover, compared to other transitional markets such as the Eastern European countries, Vietnam's economy has performed successfully (Donor, 2011). According to the Emerging Markets Opportunity Index 2010 of Grant Thornton (2010), Vietnam occupies the 16th position. Therefore, a study examining these relationships in Vietnam is essential. Against this backdrop, the purpose of this study is to investigate: (1) the effect of foreign ownership on capital structure; and (2) the impact of foreign ownership on firm performance.The rest of the paper is organized as follows: it reviews the related literature and develops the hypotheses, followed by a description of the methodology used and specification of the empirical models. Subsequently, it discusses the results, and finally, offers the conclusion.Literature Review and Hypotheses DevelopmentAgency theory introduced by Jensen and Meckling (1976) and Jensen (1986) is mostly used to interpret the relationships between ownership structure, capital structure andfirm performance. Agency theory suggests that a separation of management and ownership creates agency cost since managers may not align their own interest with those of the shareholders. …

Foreign ownership, capital structure and firm performance : empirical evidence from Vietnamese listed firms

This paper examines the relationships between ownership structure and capital structure for non-financial listed firms in Vietnam during the period 2007–2012. Although different approaches are applied in this research, all results from those models are consistent. The study finds that while foreign ownership has a negative impact on leverage, state ownership has a positive influence. Managerial ownership has a positive relation with debt level, while the effect of large ownership on debt level is not conclusive.

Ownership Structure and Capital Structure: A Study of Vietnamese Listed Firms

This paper investigates the nonlinear relationship between firm value and corporate cash holdings in a sample of non-financial Vietnamese firms from 2008 to 2013. We focus on both static and dynamic regressions to test for a nonlinear relationship. Our results reveal an ‘inverse U-shape’ relationship between firm value and cash holdings, which is in line with trade-off theory. Specially, we further test whether the optimal cash level changes under different financial conditions. In turn, this paper shows evidence of a nonlinear relationship between firm value and cash holdings under different financial circumstances and that each type of firm will adjust its optimal cash level based on business conditions.

Thi Phuong Vy Le

Papers

Capital structure and firm performance: Empirical evidence from a small transition country

Foreign Ownership, Capital Structure and Firm Value: Empirical Evidence from Vietnamese Listed Firms

Foreign ownership, capital structure and firm performance : empirical evidence from Vietnamese listed firms

Ownership Structure and Capital Structure: A Study of Vietnamese Listed Firms

Firm Value, Corporate Cash Holdings and Financial Constraint: A Study from a Developing Market