Abstract
A cross-country comparative analysis of corporate governance structures and financial performance of publicly listed companies in Singapore and Vietnam, covering a four-year period from 2008 to 2011, is undertaken in this study. More specifically, the similarities and differences in the corporate governance structures and financial performance of the companies are compared and interpreted in the institutional context of each market. On an average basis, we find that the size, composition and diversity of the boards in these two markets are statistically significantly different. In contrast, there is no statistical evidence to reject the similarities in ownership structure, board leadership structure, and financial performance between the firms of the two markets. In addition, our comparative analysis on the corporate governance structures–financial performance nexus also reveals that the performance effects of corporate governance structures vary significantly between the two markets, thus supporting the view that the performance effects of corporate governance structures are country-specific. Our findings suggest that country-level characteristics should be captured when modelling the corporate governance–firm performance relationship in cross-country comparative corporate governance research.
Highlights
Over recent decades, especially after the Asian Financial Crisis of 1997, the corporate governance–financial performance relationship has emerged as one of the most fascinating and controversial issues in the corporate finance literature
There is statistical evidence to conclude that the relationship between board size and financial performance is not significant for Vietnamese firms but significantly negative for Singaporean companies
Our findings indicate that corporate governance structures including board size, board composition and board diversity of firms in the two markets are statistically significantly different, whereas the ownership structure, board leadership structure, and financial performance of companies in both markets are not
Summary
Especially after the Asian Financial Crisis of 1997, the corporate governance–financial performance relationship has emerged as one of the most fascinating and controversial issues in the corporate finance literature. The second strand of corporate governance studies offers inconclusive findings of the CGFP relationship Many of these empirical studies suffer from endogeneity problems leading to spurious correlations and unreliable interpretations (Bhagat & Bolton, 2008; Love, 2011; Reddy, Locke, & Scrimgeour, 2010). These studies are mostly conducted in a single developed country with a large-scale capital market such as the US or the UK (Love, 2011; Reddy, 2010), and the CGFP relationships in emerging markets and cross-national comparisons are still unexplored properly
Sign-in/Register to view highlights & summary 
Published Version (
Free)
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
