Corporate ownership and firm performance. Evidence from an emerging market
Abstract
Purpose
This paper aims to examine the relationship between corporate ownership and firm performance, and the mechanisms through which ownership creates the firm value. Vietnam has been chosen as the research site because it is characterized by high ownership concentration, a high level of state ownership, strong incentives for foreign ownership and a weak external governance system.
Design/methodology/approach
We use data on the ownership structure of 527 listed firms in Vietnam during the 2010–2021 period. Corporate ownership includes concentrated, state and foreign ownership, while firm performance is measured by ROA and Tobin’s Q. In addition to Pooled OLS, system GMM and the propensity score matching are employed to mitigate the possibility of unreliable and biased results.
Findings
We find that firms with highly concentrated ownership tend to have better performance. Both state ownership and foreign ownership with their unique advantages contribute to enhancing firm performance. Further analyses delve into specific channels through how controlling shareholders, state and foreign owners facilitate firm value creation: the ease of access to capital, the lower cost of capital and the higher sales. Our results are robust to alternative proxies for ownership concentration and different methodological approaches.
Originality/value
Our study contributes to the ongoing debate about the ownership–performance relationship by providing novel insights into how corporate ownership influences firm performance.
Keywords
Acknowledgements
Funding: This article is partially funded by University of Economics - The University of Danang.
Citation
Tran, N.T.A., Vo, T.T.A. and Nguyen, H.P.T. (2025), "Corporate ownership and firm performance. Evidence from an emerging market", Managerial Finance, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MF-10-2023-0674
Publisher
:Emerald Publishing Limited
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