Impact of board characteristics, ownership structure, corporate social responsibility on firm performance in Vietnam consumer discretionary industry
Abstract
The objective of this study is investigate the impact of board characteristic, ownership structure and corporate social responsibility on firm performance. Specifically, the firm’s ownership structure is explained by 3 factors: Managerial ownership, blockholder ownership and government ownership. Moreover, board characteristic is represented by 5 factors: the size of the board, number of woman on board, duality character of the Chairperson, the proportion of non-executive directors, and the activity of the board of directors. Meanwhile, firm performance is assessed by Tobin’s Q, Return on Assets, and Return on Equity. Additionally, Firms’ characteristics are also included in this research as controlled factors .
The analyses result show that ownership structure have impact on firm performance. With the ownership structure, both Blockholder Ownership and Mangerial Ownership have positive impact on firm performance (measured by Tobin’s Q), whereas, Government Ownership have negative impact to firm performance (measured by Tobin’s Q). It means that higher managerial ownership and blockholder ownership in firms will help the firm’s performance increase better. In contrast, more Government’s shareholding control will reduce the firm’s profitability (with Tobin’s Q is measurement).Meanwhile, the result also shows that board characteristic have less affect to firm performance. Among that, duality characteristic of the Chairperson, the proportion of non-executive directors, and the activity of the board of directors have nearly no effect on firm performance. In the other hand, there is evidence to support the negative impact from size of the board and positive impact from number of woman on board on firm performance. It indicates that firms with large board size will reduce the effectiveness of firm and the higher number of woman on board can generate high performance for the company.Also, the research also figure out the strong relationship between Stock Price and Firm performance. Firm with high performance will reflect to Stock price, or we can say that if stock price increase can lead to high firm performance. Finally, the result on the analysis also implies that Ownership structure have strong effect to Firm performance than other independent
VII
variables when Government Ownership, Blockholder Ownership and Managerial (significant with p value <0.05) have higher number of Beta Coefficient than significant factors of Board Characteristic and Corporate Social Responsibility.