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Ownership structure and performance of professional service firms in a declining industry: Evidence from Vietnamese securities firms

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  • Tien Hoang Nguyen,
  • Xuan Minh Nguyen,
  • Thi Thu Ha Nguyen,
  • Quoc Trung Tran

Abstract

This study posits that the declining industry is a good institutional environment to examine the relationship between ownership structure and firm performance of Vietnamese securities firms. This downturn decreases the return on investment of the industry and creates incentives for managers to expropriate shareholders more severely. In addition, different groups of shareholders recognizing the status of the industry may have their own reactions which are likely to affect firm performance. Using pooled OLS regression with a sample of 240 observations from 56 Vietnamese securities firms over the period from 2009 to 2016, we find supporting evidence of convergence-of-interest with a significantly negative relationship between insider ownership and profitability. In addition, foreign ownership is also positively related to firm performance. Firm size affects positively firm performance while number of employees has a negative impact on profitability.

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  • Tien Hoang Nguyen, & Xuan Minh Nguyen, & Thi Thu Ha Nguyen, & Quoc Trung Tran, 2017. "Ownership structure and performance of professional service firms in a declining industry: Evidence from Vietnamese securities firms," Business and Economic Horizons (BEH), Prague Development Center, vol. 13(2), pages 142-151, May.
    • Handle: RePEc:pdc:jrnbeh:v:13:y:2017:i:2:p:142-151
    DOI: 10.15208/beh.2017.11
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    2. My Tran & Malcolm Abbott, 2021. "An Empirical Research Survey of the Productivity and Efficiency of the Securities Industry," Applied Economics and Finance, Redfame publishing, vol. 8(2), pages 42-52, March.

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    More about this item

    Keywords

    Vietnam; service; service firms; securities firms; ownership structure.;
    All these keywords.

    JEL classification:

    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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