Impact of Agency Costs on Firm Performance: Evidence from Vietnam

An assumption in agency costs theory is that agency costs can exert a negative impact on firm performance. In this study, we examine the impact of agency costs on firm performance of Vietnamese listed companies. Our sample includes 736 companies in Vietnam during the period om 2010 to 2015. We find...

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Published in:Organizations and markets in emerging economies 2019-01, Vol.10 (2), p.294-309
Main Authors: Hoang, Le Duc, Tuan, Tran Minh, Nha, Pham Van Tue, Phuong, Ta Thu
Format: Article
Language:English
Subjects:
agency cost
Boards of directors
Corporate governance
Costs
Debt financing
Econometrics
firm performance
Generalized method of moments
Hypotheses
leverage
Literature reviews
Securities markets
Stockholders
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cited_by cdi_FETCH-LOGICAL-c436t-d580cf9b03e93c0f98aa4c63b0e66ca8a05f4c2d5c9fc2b7cce5b80d90f04dbf3
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container_end_page 309
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container_title Organizations and markets in emerging economies
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creator Hoang, Le Duc
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Nha, Pham Van Tue
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description An assumption in agency costs theory is that agency costs can exert a negative impact on firm performance. In this study, we examine the impact of agency costs on firm performance of Vietnamese listed companies. Our sample includes 736 companies in Vietnam during the period om 2010 to 2015. We find that agency costs exert a negative impact on firm performance. Our results are robust to alternative econometric models, including an instrumental variables technique and a system generalized method of moment model. In addition, we show that a debt instrument can be a useful tool to reduce the negative impact of agency costs on firm performance.
doi_str_mv 10.15388/omee.2019.10.15
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subjects agency cost
Boards of directors
Corporate governance
Costs
Debt financing
Econometrics
firm performance
Generalized method of moments
Hypotheses
leverage
Literature reviews
Securities markets
Stockholders
title Impact of Agency Costs on Firm Performance: Evidence from Vietnam
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