Impact of Competitive Strategy on Corporate Governance in Companies Listed on Vietnam’s Stock Market
Main Article Content
Abstract
In this study, we explores the relationship between competative strategy and corporate governance through the analysis of 562 non-financial companies listed on the Vietnam’s stock market in 2010-2019, thereby making judgments about competitive strategies to determine which strategy has a meaningful impact on corporate governance. It is found that a cost leadership strategy has a negative impact on corporate governance, and a differentiation strategy has a positive impact on corporate governance. In addition, our study provides evidence for further studies in this field and suggests some possible solutions for investors and regulators in Vietnam.
Keywords:
Competative strategy, cost leadership strategy, differentiation strategy, corporate governance.
References
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Yermack, D. (1996). Higher market valuation of companies with a small board of directors. Journal of Financial Economics, 40(2), 185-211.
Allen, F., & Gale, D. (2000). Corporate governance and competition. Corporate Governance: Theoretical and Empirical Perspectives, 23(4), 23-94.
Ammari, A. B. B. et al. (2014). Board structure and firm performance: Evidence from French firms listed in SBF 120. International Journal of Economics and Financial Issues, 4(3), 580.
Balsam, S. et al. (2011). The impact of firm strategy on performance measures used in executive compensation. Journal of Business Research, 64(2), 187-193.
Boone, A. L. et al. (2007). The determinants of corporate board size and composition: An empirical analysis. Journal of Financial Economics, 85(1), 66-101.
Corporation, I. F. (2012). Doing Business 2013: Smarter Regulations for Small and Medium-size Enterprises. World Bank Publications.
Cremers, K. M., & Nair, V. B. (2005). Governance mechanisms and equity prices. The Journal of Finance, 60(6), 2859-2894.
Cull, R., & Xu, L. C. (2005). Institutions, ownership, and finance: the determinants of profit reinvestment among Chinese firms. Journal of Financial Economics, 77(1), 117-146.
Dallas, L. L. (2003). The multiple roles of corporate boards of directors. HeinOnline.
De Miguel, A. et al. (2004). Ownership structure and firm value: New evidence from Spain. Strategic Management Journal, 25(12), 1199-1207.
Donaldson, L. (2001). The Contingency Theory of Organizations. Sage.
Gani, L., & Jermias, J. (2006). Investigating the effect of board independence on performance across different strategies. The International Journal of Accounting, 41(3), 295-314.
Germain, L. et al. (2014). Corporate governance reform in Malaysia: Board size, independence and monitoring. Journal of Economics and Business, 75, 126-162.
Gujarati, D. (2004). Basic Econometrics. 4 th edtn. The McGraw-Hill Companies.
Hambrick, D. C. (1983). High profit strategies in mature capital goods industries: A contingency approach. Academy of Management Journal, 26(4), 687-707.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360.
Jiraporn, P. et al. (2006). Corporate governance, shareholder rights and firm diversification: An empirical analysis. Journal of Banking & Finance, 30(3), 947-963.
Klock, M. S. et al. (2005). Does corporate governance matter to bondholders? Journal of Financial and Quantitative Analysis, 40(4), 693-719.
Kotha, S., & Nair, A. (1995). Strategy and environment as determinants of performance: Evidence from the Japanese machine tool industry. Strategic Management Journal, 16(7), 497-518.
Leuz, C., & Verrecchia, R. E. (2000). The economic consequences of increased disclosure. Journal of Accounting Research, 91-124.
Linck, J. S. et al. (2008). The determinants of board structure. Journal of Financial Economics, 87(2), 308-328.
Miles, R. E. et al. (1978). Organizational strategy, structure, and process. Academy of Management Review, 3(3), 546-562.
Miller, A., & Dess, G. G. (1993). Assessing Porter's (1980) model in terms of its generalizability, accuracy and simplicity. Journal of Management Studies, 30(4), 553-585.
Morck, R., Shleifer, A., & Vishny, R. W. (1988). Management ownership and market valuation: An empirical analysis. Journal of Financial Economics, 20, 293-315.
Nair, A., & Filer, L. (2003). Cointegration of firm strategies within groups: A long‐run analysis of firm behavior in the Japanese steel industry. Strategic Management Journal, 24(2), 145-159.
Nguyen, T., Locke, S., & Reddy, K. (2015). Does boardroom gender diversity matter? Evidence from a transitional economy. International Review of Economics & Finance, 37, 184-202.
Porter, M. E. (1980). Competitive Strategy. Free Press, New York.
Porter, M. E. (1985). Technology and competitive advantage. Journal of Business Strategy, 5(3), 60-78.
Surajit, B., & Saxena, A. (2009). Does the firm size matter? An empirical enquiry into the performance of Indian manufacturing firms. SSRN.
Thompson, A. et al. (2005). Crafting and Executing Strategy-The Quest for Competitive Advantage, Concepts and Cases. McGraw-Hill, New York.
Tian, L., & Estrin, S. (2008). Retained state shareholding in Chinese PLCs: Does government ownership always reduce corporate value? Journal of Comparative Economics, 36(1), 74-89.
Tylecote, A., & Visintin, F. (2007). Corporate governance, finance and the technological advantage of nations. Routledge.
Wintoki, M. B. et al. (2012). Endogeneity and the dynamics of internal corporate governance. Journal of financial economics, 105(3), 581-606.
Wu, H.-L. (2008). When does internal governance make firms innovative? Journal of Business Research, 61(2), 141-153.
Yermack, D. (1996). Higher market valuation of companies with a small board of directors. Journal of Financial Economics, 40(2), 185-211.