Financial Reporting Quality, Corporate Governance, and Idiosyncratic Risk: Evidence from a Frontier Market

We extend current literature by providing empirical evidence on the impacts of financial reporting quality and corporate governance mechanism - two firm-level determinants that are strongly affected by the unique market setting and regulatory framework in emerging/frontier markets - and idiosyncrati...

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Bibliographic Details
Published in:Australasian accounting, business & finance journal business & finance journal, 2021-01, Vol.15 (4), p.28-46
Main Authors: Nguyen, Linh T.M., Le, Duyen, Tran, Trang, Dang, Tung
Format: Article
Language:English
Subjects:
Arbitrage
Capital assets
CAPM
Corporate governance
Data analysis
Financial reporting
financial reporting quality
Hypotheses
ideosyncratic risk
Investments
Portfolio management
Stock exchanges
vietnam
Volatility
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Summary:We extend current literature by providing empirical evidence on the impacts of financial reporting quality and corporate governance mechanism - two firm-level determinants that are strongly affected by the unique market setting and regulatory framework in emerging/frontier markets - and idiosyncratic risk in Vietnam. Utilizing different panel data analysis techniques, we find high-quality financial reports can mitigate firm-specific risk. Firms with high state ownership tend to have lower idiosyncratic risk too, implying the monitoring role of the government. We also document a positive link between board size and firm specific risk. Our results are thus beneficial for industry regulators and firms in ensuring good governance and reporting framework to better manage firm risk.
ISSN:1834-2019
1834-2000
1834-2019
DOI:10.14453/aabfj.v15i4.3