Corporate governance and the relationship between firm performance and firm value - A case of listed firms in Vietnam

Abstract

This study examines the impact of corporate governance on firm performance (accounting returns). In addition, the study distinguishes itself from current literature by exploring the moderating effect of corporate governance on the association between firm performance and firm value. Generally, secondary data of financial variables from reliable public information of firms listed on Vietnam stock market has been collected and their corporate governance performance has been evaluated following Garay and González (2008). We find that corporate governance in general is positively related to firm performance. The valuable findings wake up perception of both investors and listed companies about the importance of good corporate governance to the sustainable business development. The findings also reveal a moderating impact of corporate governance on the association between firm performance and firm value for one year (2013) of the study in which corporate governance performance is found to strengthen the positive association between firm performance and firm value. From our result analysis, implications for investors and firms and the market development in general have been suggested. Key words: corporate governance, firm performance, firm value, moderating effect, Vietnam stock market