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Corporate Governance and Stock Price Synchronicity: Empirical Evidence from Vietnam

Author

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  • Anh Huu Nguyen

    (School of Accounting and Auditing, National Economics University, Hanoi 100000, Vietnam)

  • Thu Minh Thi Vu

    (School of Accounting and Auditing, National Economics University, Hanoi 100000, Vietnam)

  • Quynh Truc Thi Doan

    (School of Accounting and Auditing, National Economics University, Hanoi 100000, Vietnam)

Abstract

This research is conducted to investigate the impact of corporate governance on stock price synchronicity in the context of the Vietnamese market. The paper tests four hypotheses proposing the effect of four crucial components of corporate governance including board size, board independence, managerial ownership, and foreign ownership on stock price synchronicity. The study sample includes 247 non-financial listed companies on the Ho Chi Minh Stock Exchange (HOSE) in Vietnam over a period of five years from 2014 to 2018. The fixed effects model is employed to address econometric issues and to improve the accuracy of the regression coefficients. The research results show the positive impact of board size and foreign ownership but the negative impact of managerial ownership on stock price synchronicity. This study confirms the viewpoint that stocks in the market move more together when the firms’ corporate governance gets better. In other words, the research findings suggest that low synchronicity signifies the corporate intransparency and weak information environment and vice versa. From this, the paper provides a new insight to managers on how to improve stock price synchronicity with corporate governance.

Suggested Citation

  • Anh Huu Nguyen & Thu Minh Thi Vu & Quynh Truc Thi Doan, 2020. "Corporate Governance and Stock Price Synchronicity: Empirical Evidence from Vietnam," IJFS, MDPI, vol. 8(2), pages 1-13, April.
    • Handle: RePEc:gam:jijfss:v:8:y:2020:i:2:p:22-:d:342312
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    References listed on IDEAS

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    3. Romlah Jaffar & Nor Asyiqin Abu & Mohamat Sabri Hassan & Mohd Mohid Rahmat, 2023. "Value Relevance of Board Attributes: The Mediating Role of Key Audit Matter," IJFS, MDPI, vol. 11(1), pages 1-21, February.

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