Ho Chi Minh Stock Exchange Research Articles

Accounting conservatism and financial performance through book value: Evidence from manufacturing enterprises listed in Vietnam

This study examined the relationship between accounting conservatism (AC) and financial performance for 231 manufacturing companies listed in Vietnam on the Hanoi Stock Exchange and Ho Chi Minh Stock Exchange stock exchanges between 2019 and 2022 using book value which includes ROA, ROE, and ROS. Accounting conservatism harms ROA, ROE, and ROS throughout six years from 2017 to 2022, according to a multivariable regression study using Ordinary Least Square (OLS), FEM, REM, and FGLS models on Stata. In addition, the COVID-19 pandemic has affected the global economy in general and manufacturing enterprises listed in Vietnam in particular, so the authors also analyze the influence of AC on financial performance in two periods, before and after COVID-19. The results obtained in the pre-COVID-19 period (from 2017 to 2019) are the same as those of the 6 years. However, from 2020 to 2022, AC has an adverse effect on ROA and ROE. Nonetheless, ROS is unaffected by AC. The article has given some discussion and recommendations to stakeholders including the government, auditors, and accountants at enterprises regarding the level of AC in enterprises to help users of financial information make the most optimal economic decisions.

Financial distress and earnings management: evidence from non-financial companies listed on the Ho Chi Minh Stock Exchange

The study examines the impact of financial distress on earnings management for Vietnamese non-financial companies. The System Generalized Method of Moments was employed to estimate a dynamic panel data model. Data were collected from non-financial companies listed on the Ho Chi Minh Stock Exchange from 2011 to 2020. The results show that financial distress has a positive impact on earnings management. Specifically, enterprises with good financial health and low risk of bankruptcy tend to make upward profit adjustments, while financially distressed enterprises tend to make downward profit adjustments. This may be due to the supervisory pressure of auditors and creditors, which makes the most affected enterprises no longer have the opportunity to undertake profit manipulation. At the same time, a company with high operating performance tends to maintain profit growth to impress investors in the market. The study results warn policymakers, enterprises, and investors when even financially sound enterprises are incentivized to undertake earnings management. This paper provides additional evidence that financial distress is positively associated with earnings management, which contradicts the findings of some prior studies.

The Asymmetric Effects of Oil Price Volatility on Stock Returns: Evidence from Ho Chi Minh Stock Exchange

This study is the first to investigate the asymmetric effects of oil price volatility on stock returns for the Ho Chi Minh Stock Exchange (HOSE). We utilized weekly series of VN30-Index, WTI crude oil prices, geopolitical risks (GPR) index, and gold prices spanning from 6 February 2012 to 31 December 2023 as data sources. Using a nonlinear autoregressive distributed lag (NARDL) bounds testing approach, we found that, in the shortterm, oil price volatility has negative asymmetric effects on market returns. Specifically, in the shortterm, a 1 percent increase in oil price volatility immediately leads to a 2.6868 percent decrease in the market returns, while a similar magnitude decrease in oil price volatility is associated with a 6.3180 percent increase in the market returns. In addition, the results obtained from the NARDL model indicated that, in the longterm, the negative and positive changes of oil price volatility have significantly negative effects on the market returns. Finally, the findings derived from the error correction model (ECM) show that a 98.21 percent deviation from the equilibrium level in the previous week is converged and corrected back to the long-term equilibrium in the current week.

Earnings management and dividend policy of listed firms in the Ho Chi Minh City stock exchange

Prior studies show that paying dividends limits private control benefits available to managers, which may restrict agency problems and the pos sibilities of managers manipulating earnings. This paper examines whether dividend policy has an impact on earnings management on a sample of listed firms on the Ho Chi Minh Stock Exchange in the period from 2012 to 2022. We use different proxies of earnings management, including accrual based and real earnings management. The results show that dividend pay ing firms have a lower level of earnings management than non-dividend paying firms. Besides, book-to-market equity ratio, firm size, leverage, re turn on assets, number of years listed and free cash flow also have impacts on earnings management. Our results are consistent when using different estimation methods, including OLS, fixed effects, random effects, GLS and GMM regressions with STATA 14. We offer some solutions for the govern ment, the firms and investors to better ensure and understand the quality of firms’ financial reporting.

Global Economic Policy Uncertainty and Corporate Investment: Empirical Evidence from Vietnam

The Economic Policy Uncertainty Index is an important indicator that influences the corporate financial and investment behavior of companies. In this study, the corporate investment behavior from 2018 to 2020 of 354 non-financial firms listed in Ho Chi Minh Stock Exchange is analyzed to determine how businesses respond to changes in the Global EPU index and to determine how Leverage, Cash flow, Tobin’s Q, Size, and Sales Growth affect business investment. In addition, the research also examined how corporate investment differs between state-owned companies and non-state-owned companies. The data was hand collected and analyzed by Pooled OLS Regression and Fixed-Effect Model through STATA software to determine the relationship between corporate investment and explanatory variables. The results of the study indicate that the correlation between corporate investment and the global EPU index is inversely proportional. This study also proves that the increase of leverage ratio is a factor that helps business investment growth.

Key Factors Impacting Business Performance an Investigation of Firms in Vietnam

This study examines factors affecting company performance on the Ho Chi Minh Stock Exchange from 2008 to 2020, analyzing internal and external variables, including the Covid-19 pandemic's impact. Using data from 40 firms and macroeconomic indicators, advanced econometric models identify key determinants of Return on Assets (ROA). Findings suggest financial leverage and operating leverage enhance ROA, while asset size and consumer inflation have mixed effects. Industrial production positively correlates with ROA, whereas the pandemic negatively impacts corporate performance. These insights inform strategic management and policy-making for economic resilience.

Impacts of inflation on the Vietnamese stock market in economic turbulence

This study employs the GARCH model to examine how inflation affects the Vietnamese stock market. The analysis uses 2001-2022 data from the General Statistics Office and the Ho Chi Minh Stock Exchange (HoSE). This time frame encompasses various market cycles, including the recent financial crises, which alter the characteristics of stock variance. The findings reveal that inflation has a strong impact on the volatility of stock indexes because the psychological herd of the stock players has a huge impact on market volatility such that it weakens the market, leading to instability due to stock prices being blown up too high or depressed too low. Herd mentality facilitates price manipulation, stock price manipulation, and speculation. When the demand for capital flows into the secondary market, a surge has led to a large amount of money in circulation. This has caused a high level of inflation. The findings indicate that a one percent increase in inflation is associated with a 6.692 percent increase in the VN index, suggesting that Vietnam’s stock market returns can hedge against inflation. Yet, the popularity of speculative investments necessitates that the Vietnamese government not only address inflation but also improve financial regulations and stock market oversight.

The Effect of Capital Structure on the Ho Chi Minh Stock Exchange (HOSE) Performance of Companies Listed in the Plastics Industry

The relationship between capital structure and company performance was examined in this study. From 2019 to 2023, information was gathered from 29 plastic firms that were listed on the Ho Chi Minh Stock Exchange (HOSE). Each company’s performance was gauged using three variables: ROA, ROE, and EPS. The major components of capital structure are the ratios of total debt to total assets (DA), total debt to equity (DE), short-term debt to total assets (SDTA), and long-term debt to total assets (LDTA). In addition, the model incorporates growth rate (GROWTH) and company size (SIZE) as control variables. Consequently, every performance characteristic of the company is negatively impacted by the majority of the capital structure variables. Notably, this study not only demonstrates the weak association between SDTA and SDTA but also the negative correlation between ROE and capital structure, which was considered minor in many earlier studies. Furthermore, prior research had not consistently shown ROE. Additionally, the study’s findings indicate that size and company performance are positively correlated and have no effect on growth pace.

The impact of shadow banking on nonfinancial firms listed on the Ho Chi Minh Stock Exchange (HOSE) – Evidence from Vietnam

This paper examines the effect of shadow banking activities on the performance and risk-taking of 339 Vietnamese nonfinancial firms listed on the Ho Chi Minh Stock Exchange (HOSE). Using manually gathered data on firms' shadow banking activities from 2009 to 2021, the expansion of shadow banking is found to have a negative effect on the overall financial soundness of the securities companies, in particular negatively affecting performance and increasing the risk tolerance of companies. We present empirical findings about several aspects of shadow banking activities, including entrusted loans, entrusted investments, private lending, leasing, and commercial credit in this study. While the majority of shadow banking operations could have a negative impact on a firm's performance, we have discovered that commercial credit grants were crucial in reducing the COVID-19 pandemic's adverse effects on businesses, highlighting the need for financial stability in times of crisis. According to our results, the risk of shadow banking activities, which have consequences for policymakers and caution for nonfinancial enterprises, must be taken into consideration.

Does Enterprise Risk Management Improve Performance and Create Shareholder Value? Empirical Evidence of Listed Firms on the Ho Chi Minh Stock Exchange, Vietnam

This study applies Agency Theory, Stakeholder theory, and Modern Portfolio Theory, which revolves around the way enterprises are organized, managed, and controlled and guides the managers’ decisions in ensuring stability and creating value based on satisfying the interests of stakeholders, to analyze the impact of enterprise risk management implementation on the firm’s performance and value creation of 285 listed firms on the Ho Chi Minh Stock Exchange, Vietnam, from 2017 to 2022. Feasible Generalized Least Squares (FGLS) estimation results show that risk management practices positively affect firm value and business performance. In addition, the study also indicates that the variables of Big 4 auditor, inspection committee presence, sales growth, firm age, firm size, and leverage have affected firm performance and value differently. The findings have several implications for investors, managers, and researchers.

The impact of overconfidence on stock market valuation: An empirical study on listed firms

Behavioral theory predicts that investor overconfidence leads to overpricing because overconfident investors overestimate the accuracy and quality of their information while underestimating risk (Adebambo & Yan, 2018). The paper investigates the impact of the overconfidence psychology of investors on firm valuation in the Vietnamese stock market. To test this relationship, the secondary data of 264 non-financial firms listed on the Ho Chi Minh Stock Exchange (HOSE) is investigated in the period of seven years from 2016–2022. The current study applies three different regression models, in which two alternative models are used to ensure the results are not sensitive to the variable proxy. This research employs the change in trading volume (CTV) variable as a main variable proxy of overconfidence and applies the feasible generalized least squares (FGLS) method as the main estimation. As a result, this study confirms the positive impact of overconfidence bias on firm valuation on the HOSE, regarding different investor overconfidence proxies since all of the proxies are statistically significant. These empirical results have several implications for market regulators, investors, and academic researchers as well as for investment costs, capital allocation, and market effectiveness.

Institutional Ownership and Stock Liquidity: Evidence From an Emerging Market

This research investigates whether institutional ownership contributes to enhancement of stock liquidity in emerging markets. The study examines data of listed companies on the Vietnamese stock market. Using a comprehensive data set for all stocks listed on Ho Chi Minh Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX) from 2008 to 2017, the statistical findings consistently demonstrate that institutional ownership has a negative impact on stock liquidity. In other words, the empirical evidence supports the adverse selection hypothesis that the upward trend of institutional ownership could reduce stock liquidity because the institutional investors with superior and advantageous information could exacerbate informational asymmetry issues. By using a case study in Vietnam, this research makes an original contribution to the academic literature by examining the relationship between institutional investors and stock liquidity in emerging markets. In addition, this study offers policymakers, authorities, agencies, and managers some insightful recommendations and implications that will help to not only promote the active participations of professional institutions but also improve stock liquidity, fairness, and efficiency.

CEO foreign experience and firm performance: does CEO tenure matter?

The study examines the impact of CEO foreign experience on firm performance and the effect of CEO tenure on this relation in the Vietnamese market. Using a unique, hand-collected dataset of non-financial firms listed on the Ho Chi Minh stock exchange (HOSE) over the period from 2013 to 2021, we find that firms led by CEOs with overseas experience tend to have higher performance as compared to their counterparts. In addition, CEO tenure strengthens the positive relationship between managerial foreign experience and firm performance. The findings indicate the importance of foreign experienced CEOs in fostering firm performance, especially in emerging markets like Vietnam.

The Impact of Corporate Governance and Ownership Structure on The Level Of Corporate Social Responsibility Disclosure of Listed Manufacturing Companies on The Ho Chi Minh Stock Exchange – Vietnam

Purpose: The study has provided an overview of the theoretical foundation and empirical evidence on the impact of corporate governance on the level of corporate social responsibility (CSR) disclosure among listed manufacturing companies on the Ho Chi Minh Stock Exchange in 2021, utilizing secondary data from 118 manufacturing firms. Theoretical framework: In accordance with Agency Theory, the Separation of Ownership and Management, and the Stakeholder Theory, this study aims to investigate the influence of corporate governance characteristics on the extent of corporate social responsibility (CSR) disclosure in the manufacturing sector. Results and conclusion: The quantitative research model is constructed with five corporate governance factors and one control variable related to company characteristics, including the board size, the proportion of female members in the board, the proportion of independent board members, the foreign ownership ratio, the state ownership ratio, and the company size. The results from the Ordinary Least Squares (OLS) regression analysis indicate that the majority of the corporate governance variables are correlated with the level of CSR disclosure, except for the proportion of independent board members. Research implications: The study suggests managerial implications to help businesses recognize the importance of corporate governance in CSR disclosure, aiming to enhance reputation and attract investments. Originality/value: Additionally, the results also demonstrate that company-specific factors, such as company size and financial leverage, significantly impact the company's profitability.

Commercial banks listed on the Ho Chi Minh City stock exchange: An analysis of diversification, human capital, and performance

Both portfolio diversification and the resource-based view theories advocate for firms to engage in the diversification of their activities to mitigate risks and enhance operational efficiency. Nevertheless, the subject at hand is a matter of contention due to the existence of a perspective that advocates for the superiority of specialization over diversification. The objective of this study is to determine the relationship between income diversification, human capital, and the financial performance of Vietnamese commercial banks. Based on an analysis of data obtained from 15 commercial banks listed on the Ho Chi Minh Stock Exchange from 2013 to 2022. Panel data regression method is used. The results indicate that diversification does not exert a significant influence on the performance of banks. However, it is seen that human capital positively impacts bank performance, suggesting a favorable relationship between human capital and bank performance. According to this result, income diversification has not had an impact on the efficiency of Vietnamese commercial banks. On the contrary, human capital is a factor that positively and strongly affects the performance of Vietnamese commercial banks. The findings of this study indicate that some management implications may be considered to enhance the operational efficiency of Vietnamese commercial banks.

Impact of Corporate Social Responsibility on Financial Performance of Production Enterprises Listed on Ho Chi Minh Stock Exchange (Hose) – Viet Nam

Purpose: The objective of this research was to analyze the approaches related to that the impact of each aspect of social responsibility on the financial performance of businesses of production companies listed on the Ho Chi Minh City Stock Exchange in Vietnam. Theoretical framework: The Stakeholder Theory has explained and justified the need for implementing Corporate Social Responsibility (CSR) with stakeholders. Results and conclusion: The results showed that the impact of each aspect of social responsibility on the financial performance of businesses, the regression results reveal that only the environmental responsibility index has a favorable effect on the Return on Assets (ROA) of the company. However, aspects of social responsibility towards employees, the community, and customers do not affect financial performance. Research implications: The research results on the impact of corporate social responsibility on financial performance in the annual reports of production companies listed on the Ho Chi Minh City Stock Exchange in Vietnam indicate that social responsibility activities and information disclosure have a positive influence on profitability and contribute to the sustainable development of the company. Originality/value: Additionally, the results also demonstrate that company-specific factors, such as company size and financial leverage, significantly impact the company's profitability.

Corporate environmental disclosures and financial distress: evidence from an emerging market

This study examines the effect of corporate environmental disclosures on financial distress in Vietnam. From sustainability reports and annual reports of firms listed on the Ho Chi Minh Stock Exchange, we manually collected a dataset on environmental information disclosures about seven management standards, including the utilization of raw materials, energy usage, water consumption, conservation of land and soil, gas emissions, wastewater and solid waste, and compliance with environmental protection laws. We measure the level of environmental information disclosures based on the counts of these standards that a firm has disclosed and employed both Altman’s Z-score and Ohlson’s O-score as proxies for financial distress. The research sample includes 269 firms from 2015 to 2020. The findings indicate that firms with better corporate environmental disclosures tend to have lower financial distress levels. The results are robust with respect to different measures of environmental information disclosures and financial distress, and have implications for investors, creditors, and policymakers. We contribute to the literature by providing evidence from a frontier market with weak legal institutions, where various environmental issues and regulations about disclosing environmental information have just gone into effect.

CEO attributes and firm performance: Evidence from companies listed on Ho Chi Minh Stock Exchange

CEO attributes and firm performance: Evidence from companies listed on Ho Chi Minh Stock Exchange

Does the Capital Structure Affect the Discretionary and Non-discretionary Firm Performance? Evidence from Vietnam

This study strives to describe how the nexus between capital structure (CAS) and firm performance (FIP) changes with and without earnings management (EAM), which previous studies have not fully addressed. For this purpose, we divide the FIP into discretionary performance (DIP) and non-discretionary performance (NDIP). Subsequently, we examine the effect of CAS on both with each studied separately to recognize the conceptual drivers in the nexus between CAS and FIP. We use the dataset of firms listed on Ho Chi Minh Stock Exchange (HOSE) during the period from 2018 to 2022. Our findings reveal that there is a negative and noteworthy impact of CAS proxied by leverage on both DIP and NDIP, which is in line with trade-off theory (TOT) and pecking-order theory (POT). Because non-discretionary accruals (NDA) play an important role in EAM, firm action is consistent with TOT or POT and, thus, this study suggests dividing EAM into discretionary accruals (DA) and NDA to test CAS theories. Additionally, Vietnamese firms use EAM to lessen the negative effect of CAS and firm size. Finally, besides the theoretical contributions, the findings of this study have important empirical implications for managers, shareholders and other stakeholders.

DIVIDEND POLICY AND SHARE PRICE VOLATILITY: EMPIRICAL EVIDENCE FROM INDUSTRIAL COMPANIES IN VIETNAM

This study investigates the relationship between share price volatility and two key features of dividend policy, dividend yield and payout ratio, in the emerging country of Vietnam by applying correlation analysis and linear regressions based on Ordinary Least Square model and robust model. The sample of the research included 67 industrial companies, which are listed publicly on the Ho Chi Minh Stock Exchange in the 5-year period, starting from 2015 to 2019. The original regression model was combined with some control variables like size, debt, growth and earning volatility. The empirical outcomes show that two key features of dividend policy, dividend yield and dividend payout ratio, and share price volatility were significantly negatively correlated. Moreover, a positive correlation between share price volatility and earning volatility was found. Growth, size and debt are three factors that had negligible impact on changes in a firm’s share prices.