Corporate governance and firm performance: Evidence from listed companies in Ho Chi Minh Stock Exchange (HOSE)
Abstract
In the context of a harsh business environment where economic crisis outbreaks not only in the domestic market but also in the international ones, corporate governance has become more important to firms‟ success. This research aims at investigating the relationship between corporate governance and firm performance for listed companies in Hochiminh stock exchange, including
298 firms in various industries. Using the descriptive test, Spearman‟s correlation and multiple regression models, we construct Corporate Governance Index (CGI) and find out that corporate governance has significant and positive relationship with firm performance measured in terms of return on assets (ROA) and return on equity (ROE).This research shows the same result with previous studies over the world such as the study of Bhagat and Bolton (2008), and Claessens (2003). The research also shows that corporate governance index in HOSE in 2011 is with the mean of 48.11%. Some recommendations are given in the research to help improve the corporate governance practices, and thereby improve firm
performance in Vietnam.