Family ownership, strategy risks and firms performance

102 2 0
  • Loading ...
1/102 trang
Tải xuống

Thông tin tài liệu

Ngày đăng: 29/11/2018, 00:02

UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM INSTITUTE OF SOCIAL STUDIES THE HAGUE THE NETHERLANDS VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS FAMILY OWNERSHIP, STRATEGIC RISKS AND FIRM’S PERFORMANCE BY NGUYEN SON KIEN MASTER OF ARTS IN DEVELOPMENT ECONOMICS HO CHI MINH CITY, November 2015 UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM INSTITUTE OF SOCIAL STUDIES THE HAGUE THE NETHERLANDS VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS FAMILY OWNERSHIP, STRATEGIC RISKS AND FIRM’S PERFORMANCE A thesis submitted in partial fulfilment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS By NGUYEN SON KIEN Academic Supervisor: VO HONG DUC HO CHI MINH CITY, November 2015 Declaration “I certify the content of this dissertation has not already been submitted for any degree and is not being currently submitted for any other degrees I certify that, to the best of my knowledge, any help received in preparing this dissertation and all source used, have been acknowledged in this dissertation.” Signature Nguyen Son Kien Date: November 23th, 2015 Page |i Acknowledgement Foremost, I would like to express my sincere gratitude to my supervisor Dr Vo Hong Duc, for his patience, motivation, enthusiasm, sympathy, altruism, immense knowledge, and for giving me valuable opportunities His guidance helped me at all the time of research and writing of this thesis I could not have imagined having a better advisor and mentor for my study In addition my advisor, I would like to thank Dr Pham Khanh Nam who has his expertise view with me, the valuable experience in research, and Dr Truong Dang Thuy who has provided the practical econometric technique, a valuable knowledge in research Furthermore, I would also like to thank all lecturers and staff at the Vietnam Netherlands Program and my VNP 20 classmates Last but not the least, I would like to acknowledge an unconditional love from my family to me over the last 25 years A special thank is to my parents for their support throughout my life, to my sixth aunt and her husband for valuable and memorable support during my studies And, a special girl has come to this world and changed my life She can only be one person – a very special person She is Diep P a g e | ii Abstract A corporate governance framework is required for a successful operation of firms This framework is generally known to include various aspects of corporate governance, including ownership structure, characteristics of the board of directors and the strategic risks (including both systematic and non-systematic risk) of the firms And the list of factors included in this corporate governance framework does not stop there This study is conducted to consider the potential impact of the following two fundamental issues on firm’s performance: (i) family ownership, together with other corporate governance factors; and (ii) strategic risk Firm’s performance is proxied by each of three dimensions of measurement: (i) the market factor (Tobin’s Q); (ii) the accounting factor (ROA); and (iii) the risk of bankruptcy factor (Z-Score) Data were collected from 289 listed companies in the Ho Chi Minh stock exchange in 2013 This study employs multivariate analysis to identify the effect from family ownership on firm’s performance whereas generalized structural equation model is utilized to investigate the possible link between strategic risk and the performance of listed firms via both direct and indirect channels, Findings from this study indicate that family ownership (the ownership and family involvement in the board of directors; presence of relatives to the founders in the company; and family members being the CEO) could negatively affect firm’s performance which then results in a lower level of firms’ performance (lower ROA) and a higher risk of bankruptcy (higher Z-score) In addition, the relationship between the strategic risks and firm’s performance is presented in both direct and indirect channels Findings from this study also provide an empirical evidence to confirm the positive effect on firm’s performance from the experienced directors and foreign investors However, this study fail to support the link between a number of corporate governance factors such as: (i) the board size; the duality (being a chairman and the CEO), the diversity (a presence of female directors in the board structure) and outside directors to firm’s performance These findings are somewhat consistent with the conclusions from various reports published by the IFC; the State Securities Commission Vietnam (2006, 2010); and International Finance Corporation (2012), in relation to weak applications of the standard corporate governance framework in the Vietnam’s corporate environment In addition, while there is a significant positive effects of capital expenditure on firm’s performance, the effect is negative for impact of increasing more debt on firm’s performance P a g e | iii Key words: Corporate governance framework; Family ownership; Strategic risks; Multivariate analysis; GSEM; Treatment effects model; Listed firms; Ho Chi Minh City P a g e | iv TABLE OF CONTENTS Declaration i Acknowledgement ii Abstract iii Chapter 1: Introduction 1.1 Problem statement 1.2 Research objectives 1.3 Research questions 1.4 Research scope 1.5 The thesis structure 2.1 The theoretical literature 2.1.1 2.1.1.1 Why is family ownership different from other concentrated ownership? 2.1.1.2 Potential benefits of family ownership 2.1.1.3 Potential costs of family ownership 2.1.2 Theoretical background of corporate governance 2.1.2.1 The perspective of “Legalistic” theory 2.1.2.2 The theory of “Resources dependence” 10 2.1.2.3 The theory of “Hegemony” 11 2.1.3 Corporate governance framework 11 2.1.3.1 The conceptualization of the “Corporate Governance” 11 2.1.3.2 Why does corporate governance matter for the company? 12 2.1.4 Vietnam’s corporate governance and institutional background 12 2.1.4.1 The adoption of corporate governance standards in Vietnam’s context 12 2.1.4.2 Legal framework in Vietnam 13 2.1.5 Strategic risk and performance 15 2.1.5.1 The initial approach 15 2.1.5.2 The perspective of “risk behavior” theory 16 2.1.5.3 The perspective of “prospect” theory 16 2.1.5.4 The perspective of “Behavior” theory 17 2.1.5.5 The strategy of “diversification” 18 2.1.6 2.2 Perspectives of family’s effect Idiosyncratic (unsystematic) risk and family’s business 18 2.1.6.1 The reinforcement of the family’s power 18 2.1.6.2 The respondent strategy for the threat 19 2.1.6.3 The diversification, risk, and family’s decision 19 Empirical studies 20 Page |v 2.2.1 Empirical evidence of family effect on firm’s performance 20 2.2.2 Empirical evidence of corporate governance on firm performance 21 2.2.3 Empirical evidences of strategic risk on firm’s performance 23 2.2.4 Empirical evidences of idiosyncratic risk on family’s business 25 2.3 Hypothesis construction and the conceptual framework 26 2.3.1 The family’s effect and the firm performance 26 2.3.2 The corporate governance factors and the firm performance 26 2.3.2.1 The role of board size 26 2.3.2.2 The role of diversity and independent directors 27 2.3.2.3 The role of duality 27 2.3.2.4 The role of board’s experience 27 2.3.2.5 The role of foreign ownership 28 2.3.3 The strategic risk, family’s effect and firm performance 28 2.3.3.1 The strategic risk and firm performance 28 2.3.3.2 The idiosyncratic (unsystematic) risk, family and firm performance 29 2.3.4 The various facets of firm performance 29 2.3.5 The conceptual framework 31 3.1 Data sources 32 3.2 Research methodology 32 3.2.1 3.2.1.1 The constructed model 32 3.2.1.2 Multivariate analysis of variance 34 3.2.1.3 Multivariate regression model 36 3.2.2 The Generalized structural equation model (GSEM) 38 3.2.2.1 The recursive (causal) structural models 38 3.2.2.2 The path diagrams and the system of equation 39 3.2.2.3 Model specification 41 3.2.2.4 The measurement of risk 41 3.2.3 4.1 Multivariate analysis 32 The sensitive analysis of sample selection model 42 Data descriptions 44 4.1.1 Descriptive statistics 44 4.1.2 The descriptions by groups 45 4.1.3 The variable correlation 51 4.2 The family’s effects, corporate governance, and firm performance 53 4.2.1 Multivariate analysis of covariance (MANCOVA) 53 4.2.2 Multivariate regression model 54 4.2.2.1 The family’s involvement, corporate governance and firm performance 54 4.2.2.2 The founding family, corporate governance and firm performance 55 P a g e | vi 4.2.2.3 4.3 The family CEO, corporate governance and firm performance 55 The strategic risk, family’s effects, and firm performance 59 4.3.1 The strategic risk, family’s involvement, and performance 59 4.3.2 The strategic risk, founding family, and performance 59 4.3.3 The strategic risk, family CEO, and performance 60 4.4 The sensitive analysis 64 5.1 Concluding remarks 69 5.2 Policy implications 72 5.2.1 The implications for the companies 72 5.2.2 The implications for the Vietnam’s authority and government 73 5.3 The limitation and further researches 74 REFERENCES 75 APPENDIX 84 Appendix A The overlap map of family’s aspects 84 Appendix B The perspective of ownership concentration 85 Appendix C The perspective of the OECD principals 87 P a g e | vii LIST OF TABLES Table 1: Descriptive statistic 45 Table 2: Correlation 52 Table 3: Multivariate analysis of variance 53 Table 4: Multivariate regression model of family’s involvement 56 Table 5: Multivariate regression model of founding family 57 Table 6: Multivariate regression model of family CEO 58 Table 7: The strategic risk, family’s involvement, and firm performance 61 Table 8: The strategic risk, founding family, and firm performance 62 Table 9: The strategic risk, family CEO, and firm performance 63 Table 10: The adjusting selection bias in the family’s involvement 66 Table 11: The adjusting selection bias in the founding family 67 Table 12: The adjusting selection bias in the family CEO 68 P a g e | viii Collins, J M., & Ruefli, T W (2012) Strategic risk: a state-defined approach Springer Science & Business Media Conrad, G R., & Plotkin, I H (1968) RISK-RETURN-UNITED-STATES INDUSTRY PATTERN Harvard Business Review, 46(2), 90-99 Cool, K., Dierickx, I., & Jemison, D (1989) Business strategy, market structure and risk‐ return relationships: A structural approach Strategic Management Journal, 10(6), 507-522 Corbetta, G., & Salvato, C (2004) Self‐serving or self‐actualizing? Models of man and agency costs in different types of family firms: A commentary on “comparing the agency costs of family and non‐family firms: Conceptual issues and exploratory evidence Entrepreneurship Theory and Practice, 28(4), 355-362 Craig, J B., Dibrell, C., & Garrett, R (2014) Examining relationships among family influence, family culture, flexible planning systems, innovativeness and firm performance Journal of Family Business Strategy, 5(3), 229-238 Cung, N D (2008) Corporate governance in Vietnam: regulations, practices and problems CIEM - The Ministry of Planning and Investment of Vietnam Dahlquist, M., & Robertsson, G (2001) Direct foreign ownership, institutional investors, and firm characteristics Journal of Financial Economics, 59(3), 413-440 Davis, J H., Schoorman, F D., & Donaldson, L (1997) Toward a stewardship theory of management Academy of Management review, 22(1), 20-47 De Massis, A., Kotlar, J., Chua, J H., & Chrisman, J J (2014) Ability and Willingness as Sufficiency Conditions for Family‐Oriented Particularistic Behavior: Implications for Theory and Empirical Studies Journal of Small Business Management, 52(2), DeAngelo, H., & DeAngelo, L (2000) Controlling stockholders and the disciplinary role of corporate payout policy: A study of the Times Mirror Company Journal of Financial Economics, 56(2), 153-207 Deloitte (2009) International Accounting Standards 24 Retrieved from Deloitte Demsetz, H., & Lehn, K (1985) The structure of corporate ownership: Causes and consequences The Journal of Political Economy, 1155-1177 Donaldson, L., & Davis, J H (1991) Stewardship theory or agency theory: CEO governance and shareholder returns Australian Journal of management, 16(1), 49-64 Dung, T T (2011) Corporate Governance: Empirical Research on Board Size, Board Composition, Board Activity, Ownership Concentration and Their Effects on Performance Of Vietnamese Listed Companies Högskolan i Borås/Institutionen Handels- och IT-högskolan (HIT) University of Borås/School of Business and IT Dutta, P., & Bose, S (2006) (2006) Gender diversity in the boardroom and financial performance of commercial banks: Evidence from Bangladesh The Cost and Management, 34(6), 70-74 Eddleston, K A., Kellermanns, F W., & Sarathy, R (2008) Resource configuration in family firms: Linking resources, strategic planning and technological opportunities to performance Journal of Management Studies, 45(1), 26-50 Erhardt, N L., Werbel, J D., & Shrader, C B (2003) Board of director diversity and firm financial performance Corporate governance: An international review, 11(2), 102111 Faccio, M & (2002) The ultimate ownership of Western European corporations Journal of financial economics, 65(3), 365-395 Faccio, M., Lang, L H., & Young, L (2001) Dividends and expropriation American Economic Review, 54-78 P a g e | 77 Fama, E F., & Jensen, M C (1983) Separation of ownership and control Journal of law and economics, 301-325 Fiegenbaum, A., & Thomas, H (1990) (1990) Stakeholder risks and Bowman's risk/return paradox: What risk measure is relevant for strategists Risk, strategy, and management, 111-133 Fiegenbaum, A., & Thomas, H (1988) Attitudes toward risk and the risk–return paradox: prospect theory explanations Academy of Management journal, 31(1), 85-106 Figenbaum, A., & Thomas, H (1986) (1986) Dynamic and risk measurement perspectives on bowman's risk‐return paradox for strategic management: An empirical study Strategic Management Journal, 7(5), 395-407 Finegold, D., Benson, G S., & Hecht, D (2007) Corporate boards and company performance: Review of research in light of recent reforms Corporate Governance: an international review, 15(5), 865-878 Fisher, I N., & Hall, G R (1969) Risk and corporate rates of return The Quarterly Journal of Economics, 79-92 Fletcher, J (2000) On the conditional relationship between beta and return in international stock returns International Review of Financial Analysis, 9(3), 235-245 Florackis, C., Kostakis, A., & Ozkan, A (2009) Managerial ownership and performance Journal of Business Research, 62(12), 1350-1357 Freeman, N J., & Nguyen, V L (2006) Corporate governance in Vietnam: the beginning of a long journey (No 22) International Finance Corporation, World Bank Group Gill, A., & Mathur, N (2011) Board size, CEO duality, and the value of Canadian manufacturing firms Journal of Applied Finance and Banking, 1(3), 1-13 Gomez-Mejia, L R., Cruz, C., Berrone, P., & De Castro, J (2011) The bind that ties: Socioemotional wealth preservation in family firms The Academy of Management Annals, 5(1), 653-707 Gomez-Mejia, L R., Haynes, K., Nunez-Nickel, M., Jacobson, K., & Moyano-Fuentes, J (2007) Family owned firms: Risk loving or risk averse Administrative Science Quarterly, 52(1), 106-137 Gomez-Mejia, L R., Larraza-Kintana, M., & Makri, M (2003) The determinants of executive compensation in family-controlled public corporations Academy of management journal, 46(2), 226-237 Gomez‐Mejia, L R., Makri, M., & Kintana, M L (2010) Diversification decisions in family‐controlled firms Journal of management studies, 47(2), 223-252 Gomez-Mejia, L R., Nunez-Nickel, M., & Gutierrez, I (2001) The role of family ties in agency contracts Academy of management Journal, 44(1), 81-95 Górriz, C G., & Fumás, V S (1996) Ownership structure and firm performance: Some empirical evidence from Spain Managerial and Decision Economics, 17(6), 575-586 Greve, H R (1998) Performance, Aspirations, and Risky Organizational Change Administrative Science Quarterly, 58-86 Grossman, S J., & Hart, O D (1980) Takeover bids, the free-rider problem, and the theory of the corporation The Bell Journal of Economics, 42-64 Guo, S., & Fraser, M W (2014) Propensity score analysis: Statistical methods and applications (Vol 11) Sage Publications H.Greene, W (2012) Econometric analysis (Seventh ed.) England: Prentice Hall Hackett, J T (1985) Concepts and practice of agency theory with the corporation Recent advances in corporate finance, 163-172 P a g e | 78 Hang, H T T (2015) (2015) The Effect Of Capital Structure On Corporate Performance: Evidence In Vietnam GSTAR - 2015 - Indonesia Global Illuminators Heckman, J J (1978) Dummy Endogenous Variables in a Simultaneous Equation System Econometrica: Journal of the Econometric Society, 931-959 Heckman, J J (1979) Sample selection bias as a specification error Econometrica: Journal of the econometric society, 153-161 Holmstrom, B (1982) Moral hazard in teams The Bell Journal of Economics, 324-340 Hurdle, G J (1974) (1974) Leverage, risk, market structure and profitability The Review of Economics and Statistics, 478-485 IFC and State Securities Commission Vietnam (2006) Report on the Observance of Standards and Codes (ROSC) - Corporate Governance Country Assessment Corporate Governance World Bank IFC and The State Securities Commission (2010) Corporate Governance - Baseline Report 2010 Corporate Governance World Bank International Finance Corporation (2012) Vietnam corporate governance scorecard 2012 IFC, World Bank group International Finance Corporation (2013) Corporate Governance Retrieved from International Finance Corporation, World Bank group: http://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/ corporate+governance/overview/why+corporate+governance Isakov, D., & Weisskopf, J P (2014) Are founding families special blockholders? An investigation of controlling shareholder influence on firm performance Journal of Banking & Finance, 41, 1-16 Jaggi, B., Leung, S., & Gul, F (2009) Family control, board independence and earnings management: Evidence based on Hong Kong firms Journal of Accounting and Public Policy, 28(4), 281-300 James, H S (1999) Owner as manager, extended horizons and the family firm International Journal of the Economics of Business, 6(1), 41-55 Jameson, M., Prevost, A., & Puthenpurackal, J (2014) Controlling shareholders, board structure, and firm performance: Evidence from India Journal of Corporate Finance, 27, 1-20 Jegers, M (1991) Prospect theory and the risk-return relation: Some Belgian evidence Academy of Management Journal, 34(1), 215-225 Jegers, M (1991) Prospect theory and the risk-return relation: Some Belgian evidence Academy of Management Journal, 34(1), 215-225 Jensen, M C (1993) (1993) The modern industrial revolution, exit, and the failure of internal control systems The Journal of Finance, 48(3), 831-880 Jensen, M C., & Meckling, W H (1979) Theory of the firm: Managerial behavior, agency costs, and ownership structure Springer Netherlands Joh, S W (2003) Corporate governance and firm profitability: evidence from Korea before the economic crisis Journal of financial Economics, 68(2), 287-322 Johnson, R A., & Wichern, D W (2008) Applied multivariate statistical analysis (Vol 6th) Pearson Kellermanns, F W., Eddleston, K A., Sarathy, R., & Murphy, F (2012) Innovativeness in family firms: A family influence perspective Small Business Economics, 38(1), 85101 Khandker, S R., Koolwal, G B & Samad, H A (2010) Hankbook on impact evaluation: quantitative methods and pratices World Bank Publications P a g e | 79 Khattree, R., and Naik, D N (2000) Applied multivariate statistics with SAS software SAS Institute Kim, M K., & Ismail, B E (1998) An accounting analysis of the risk-return relationship in bull and bear markets Review of Financial Economics, 7(2), 173-182 King, M R., & Santor, E (2008) Family values: Ownership structure, performance and capital structure of Canadian firms Journal of Banking & Finance, 32(11), 24232432 Klein, A (1998) Firm performance and board committee structure The Journal of Law and Economics, 41(1), 275-304 Kline, R B (2011) Principles and Practice of Structural Equation Modeling Guilford Press Lall, S., & Mohammad, S (1983) Foreign ownership and export performance in the large corporate sector of India The Journal of Development Studies, 20(1), 56-67 Larraza-Kintana, M., Wiseman, R M., Gomez-Mejia, L R., & Welbourne, T M (2007) Disentangling compensation and employment risks using the behavioral agency model Li, K., & Prabhala, N R (2008) Self-selection model in corporate finance Handbook of Empirical Corporate Finance, Vol Elserver B V Lintner, J (1965) The valuation of risk assets and the selection of risky investments in stock portfolios and capital budgets The review of economics and statistics, 13-37 Lipton, M., & Lorsch, J W (1992) (1992) A modest proposal for improved corporate governance The business lawyer, 59-77 Louden, J K., & Zusman, J (1982) The director: A professional's guide to effective board work American Management Associations Masulis, R W., Pham, P K., & Zein, J (2011) Family business groups around the world: Financing advantages, control motivations, and organizational choices Review of Financial Studies, 24(11), 3556-3600 Mayers, A (25 Apr 2013) Introduction to statistics and SPSS in Psychology Pearson McGee, R W (2009) Corporate governance in developing economies (pp 3-22) Springer US McNamara, G., & Bromiley, P (1999) Risk and return in organizational decision making Academy of Management Journal, , 42(3), 330-339 Miller, D B.‐M (2011) Family and lone founder ownership and strategic behaviour: Social context, identity, and institutional logics Journal of Management Studies, 48(1), 125 Miller, D., & Le Breton-Miller, I (2005) Managing for the long run: Lessons in competitive advantage from great family businesses Harvard Business Press Miller, D., Le Breton-Miller, I., Lester, R H., & Cannella, A A (2007) Are family firms really superior performers? Journal of Corporate Finance, 13(5), 829-858 Miller, K D., & Bromiley, P (1990) (1990) Strategic risk and corporate performance: An analysis of alternative risk measures Academy of Management Journal, 33(4), 756779 Miller, K D., & Bromiley, P (1990) Strategic risk and corporate performance: An analysis of alternative risk measures Academy of Management Journal, 33(4), 756-779 Miller, K D., & Leiblein, M J (1996) (1996) Corporate risk-return relations: Returns variability versus downside risk Academy of Management Journal, 39(1), 91-122 Miller, K D., & Leiblein, M J (1996) (1996) Corporate risk-return relations: Returns variability versus downside risk Academy of Management Journal, 39(1), 91-122 P a g e | 80 Minh, T L (2008) Corporate governance of listed companies in Vietnam Bond Law Review, 20(2) Mishra, C S., & McConaughy, D L (1999) Founding family control and capital structure: The risk of loss of control and the aversion to debt Entrepreneurship theory and practice, 23, 53-64 Morck, R., Shleifer, A., & Vishny, R W (1988) Management ownership and market valuation: An empirical analysis Journal of financial economics, 20, 293-315 Morck, R., Stangeland, D., & Yeung, B (2000) Inherited Wealth, Corporate Control, and Economic Growth The Canadian Disease? In Concentrated Corporate Ownership (pp 319-372) University of Chicago Press Muthén, B (1984) A general structural equation model with dichotomous, ordered categorical, and continuous latent variable indicators In Psychometrika (pp 49(1), 115-132) Nickel, M N., & Rodriguez, M C (2002) A review of research on the negative accounting relationship between risk and return: Bowman's paradox Omega, 30(1), 1-18 OECD, I (2004) OECD principles of corporate governance Oviatt, B M., & Bauerschmidt, A D (1991) (1991) Business risk and return: A test of simultaneous relationships Management Science,, 37(11), 1405-1423 Paxton, P., Hipp, J R., Marquart-Pyatt, S., & Marquart-Pyatt, S T (2011) Nonrecursive models: Endogeneity, reciprocal relationships, and feedback loops (Vol (Vol 168).) SAGE Publications Peni, E (2014) CEO and Chairperson characteristics and firm performance Journal of Management & Governance, , 18(1), 185-205 Pérez-González, F (2006) Inherited control and firm performance The American economic review, 1559-1588 Pfeffer, J (1972) Size and composition of corporate boards of directors: The organization and its environment Administrative science quarterly, 218-228 Phung, D N., & Hoang, T P T (2013, September) Corporate Ownership and Firm Performance in Emerging Market: A Study of Vietnamese Listed Firms InWorld Business and Social Science Research Conference Bangkok October Provan, K G (1980) Board power and organizational effectiveness among human service agencies Academy of Management journal, 23(2), 221-236 Pugesek, B H., Tomer, A., & Von Eye, A (Eds.) (2003) Structural equation modeling: applications in ecological and evolutionary biology Cambridge University Press Quang D X & Xin, W Z (2014) The Impact of Ownership Structure and Capital Structure on Financial Performance of Vietnamese Firms International Business Research, 7(2), p64 Quang, T., Swierczek, F W., & Thi Kim Chi, D (1998) Effective leadership in joint ventures in Vietnam: a cross-cultural perspective Journal of Organizational Change Management, 11(4), 357-372 Rabe-Hesketh, S., Skrondal, A., & Pickles, A (2004) (2004) Generalized multilevel structural equation modeling Psychometrika Ratcliff, R E (1980) Banks and corporate lending: an analysis of the impact of the internal structure of the capitalist class on the lending behavior of banks American Sociological Review, 553-570 Rechner, P L., & Dalton, D R (1986) Board composition and shareholder wealth: An empirical assessment International Journal of Management, 3(2), 86-92 Rencher, A C (2003) Methods of multivariate analysis John Wiley & Sons P a g e | 81 Rouf, M (2011) The relationship between corporate governance and value of the firm in developing countries: Evidence from Bangladesh The International Journal of Applied Economics and Finance, 5, 237-244 Ruefli, T W., Collins, J M., & Lacugna, J R (1999) Risk measures in strategic management research: auld lang syne? Strategic Management Journal, 20(2), 167194 Schack, J (2001) All in the Family Institutional Investor Schulze, W S., Lubatkin, M H., & Dino, R N (2003) (2003) Exploring the agency consequences of ownership dispersion among the directors of private family firms Academy of Management Journal, 46(2), 179-194 Sharpe, W F (1964) (n.d.) Capital asset prices: A theory of market equilibrium under conditions of risk The journal of finance, 19(3), 425-442 Shleifer, A., & Vishny, R W (1997) A survey of corporate governance The journal of finance, 52(2), 737-783 Singh, J V (1986) Performance, slack, and risk taking in organizational decision making Academy of management Journal, 29(3), 562-585 Sinha, T (1994) Prospect theory and the risk return association: another look Journal of Economic Behavior & Organization, 24(2), 225-231 Sirmon, D G., Arregle, J L., Hitt, M A., & Webb, J W (2008) The role of family influence in firms' strategic responses to threat of imitation Entrepreneurship Theory and Practice, 32(6), 979-998 Smith, N., Smith, V., & Verner, M (2006) (2006) Do women in top management affect firm performance? A panel study of 2,500 Danish firms International Journal of Productivity and Performance Management, 55(7), 569-593 Sraer, D., & Thesmar, D (2007) Performance and behavior of family firms: Evidence from the French stock market Journal of the European economic Association, 5(4), 709751 StataCorp 2013 (2013) Stata 13 Base Reference Manual College Station, TX: Stata Press Stein, J C (1988) Takeover threats and managerial myopia The Journal of Political Economy, 61-80 T., S (2008) Family firm and firm performance: Evidence from Japan Journal of The Japanese and International Economis, 620-646 Tagiuri, R., & Davis, J (1996) Bivalent attributes of the family firm Family business review, 9(2), 199-208 The Ministry of Finance (2007) Vietnam Patent No 15/2007/QĐ-BTC The National Assembly of Vietnam (2005) Vietnam Patent No 60/2005/QH11 Tobin, J (1958) Liquidity preference as behavior towards risk The review of economic studies, 65-86 Tsoutsoura, M (2014) The effect of succession taxes on family firm investment: Evidence from a natural experiment The Journal of Finance Vance, S C (1978) Corporate governance: Assessing corporate performance by boardroom attributes Journal of Business Research, 6(3), 203-220 Vietnam Ministry of Finance (2012) “Circular No 121/2012/TT-BTC dated on July 26, 2012 issuing the regulations on corporate governance which is applied to public companies” VietNam: Vietnam Ministry of Finance Villalonga, B., & Amit, R (2006) How family ownership, control and management affect firm value? Journal of financial Economics, 80(2), 385-417 P a g e | 82 Vo, H D., & Nguyen, M T., (2014) The Impact of Corporate Governance on Firm Performance: Empirical Study in Vietnam International Journal of Economics and Finance, 6(6), p1 Vo, H D., & Phan, B G T., (2013) Corporate governance and firm performance: empirical evidence from Vietnam Journal of Development Economics Ward, J L (1988) The special role of strategic planning for family businesses Family business review, 1(2), 105-117 Ward, J L (2004) Perpetuating the family business: 50 lessons learned from long lasting, successful families in business Palgrave Macmillan Williamson, O E (1979) Transaction-cost economics: the governance of contractual relations Journal of law and economics, 233-261 Wiseman, R M., & Bromiley, P (1996) Toward a model of risk in declining organizations: An empirical examination of risk, performance and decline Organization Science, 7(5), 524-543 Wooldridge, J M (2010) Econometric analysis of cross section and panel data MIT press World Bank (2013) Report on the observance of standards and codes (ROSC): Corporate governance country assessment in Vietnam World Bank Yermack, D (1996) (1996) Higher market valuation of companies with a small board of directors Journal of financial economics, 40(2), 185-211 Yoo, S S., Schenkel, M T., & Kim, J (2014) Examining the Impact of Inherited Succession Identity on Family Firm Performance Journal of Small Business Management, 52(2), 246-265 Zahra, S A., & Pearce, J A (1989) (1989) Boards of directors and corporate financial performance: A review and integrative model Journal of management, 15(2), 291334 Zellner, A (1962) An efficient method of estimating seemingly unrelated regressions and tests for aggregation bias Journal of the American statistical Association, 57(298), 348-368 Zellweger, T M., Eddleston, K A., & Kellermanns, F W (2010) Exploring the concept of familiness: Introducing family firm identity Journal of family business strategy, 1(1), 54-63 P a g e | 83 APPENDIX Appendix A The overlap map of family’s aspects First, based on the view of “Bivalent Attribute”, Tagiuri and Davis (1996) and Ward (2004) has demonstrated the inherent and unique attributes in the family business, considered as a double nature or the simultaneous roles in governance fabric, and characterized its various aspects in the overlap framework: (i) the family’s involvement; (ii) founding family; and (iii) family’s managers (Figure 2.1) The Overlap map in the “Bivalent Attribute” theory Owners Managers Family Sources: Tagiuri and Davis (1996) The welfare and the consensus would be interested primarily since there was the family member Whereas the investment return and the firm value would be focused when the owners presented And the work effectiveness or efficiency would be concerned if there was a manager Each of these simultaneous characteristics will build up the obligation for each of the entities As a result, the loyalty will be created as primary purpose It can be a standing behind for all decisions Second, by the view of how family contribute to firm success, Zellweger et al (2010) has developed the overlap fabric for the various family attributes, analyzed the three dimension of “familiness”, such the essence, of the involvement, and of the organizational identity P a g e | 84 Appendix B The perspective of ownership concentration A number of theoretical literature and empirical research have noticed the impact of the ownership structure on firm’s performance for decades These literatures inferred the problem of the conflict between the owners’ and the managers’ interests which is generally considered as the contractual view of agency problem (Jensen and Meckling 1976; Fama and Jensen 1983 , Shleifer and Vishny 1997) The first aspect is the conflict of management and finance or of the ownership and control The investors support the funds for the companies so as to get the productive use or cash out their holding in firms In responding, the financiers ask the manager specialize human capital, complete the company’s activities so as to create returns for the funds Whereas, the managers don’t have enough capital for their own invest, want the financiers’ funds, thereby will finish the financiers’ requirement However, the financiers can’t be sure the merit value of the manger’s decision making In the fact that, the financiers and the manger sign a contract in order to identifies what the manager does with the funds It will specify how the return are shared for the managers and the financiers Ideally, there would be a complete contract that define exactly what the manager does, how the profits are divided The trouble is, most future eventuality are hard to characterize or anticipate It means that the managers and the financiers have to make decisions in a situation of not fully predicted (Shleifer and Vishny 1997) It has happened since the principals asked the agents to perform some service on their behalf These services includes the delegation of some decision making Nevertheless, the agent could in their own way for their own interests, thereby there could be some divergence between the principal’s target and the agent’s decision making This deflection has been considered as the “agency cost” or referred as the “residual loss” This cost involves the costs of structuring, bonding and designing a set of relationship among the agents with conflicting interests In order to avoid the divergence of the interests, Agrawal and Knoeber 1996, Shleifer and Vishny 1997 deliberate the congruent monitoring mechanism for the aberrant activities agents as following First, it is the internal mechanism (the corporate structure, the managerial structure, and the concentrated ownership) which relies on how internal entities of a company can control problem itself It means that shareholders are involved in the management process using their voting right, so as the most suitable managers are selected In this situation, a small P a g e | 85 number of large shareholders are efficiently involved in this process instead of a large number of minority shareholders They would possess a stronger incentive and a greater power to monitor management activities rather the small ones Second, in contrast, an external corporate mechanism concerned the parties outside monitoring the firm It includes the use of debt which focuses on the evaluation of manager’s performance from the capital market; the labor market for managers which depend on the prospective employers; and the market for corporate control which clarifies the prospective acquires P a g e | 86 Appendix C The perspective of the OECD principals The OECD standard for corporate governance has been conceded and universally applicable in around the world It provides the framework and endorses the benchmark for the corporate governance component of the report of World Bank group These principles which contribute the pattern for the policy makers create a good mechanism, a stable financial market for the companies operate and develop, and an environment that the investors or shareholders constitute a pivotal role in encouraging the corporate governance issue, thereby improve the firm performance (OECD, 2004) The standard corporate governance mechanism has been studied in the OECD principle (OECD, 2004) includes six areas: (i) an effective corporate governance framework; (ii) the right for the shareholders; (iii) the fair treatment for the shareholders; (iv) the right for stakeholders; (v) disclosure and transparency; (vi) the obligation of the board The guarantee for an effective framework corporate governance An effective framework governance should encourage the transparency and the efficiency It need to be consistent with the division of responsibility and the rule of law across the institution, the regulatory or authorities, and the different market In most general terms, the framework will concern the development of the overall economic performance, the incentive for entire the market, and the entities in the market It means that the promotion for and transparency will be in the high notice for construction the corporate governance framework The rights for the shareholders The exercise of shareholders’ rights should be protected and facilitated by the corporate governance framework.it means that the shareholders have the right to following issue: secure registration, transfer share, obtain relevant material or information about the company, particular and vote in general meeting, elect or remove member of the board, and share the profit of corporation In addition, the capital structure, arrangements, the exercise of ownership right should be disclosure and simplified; and the company need to concern about the basic shareholder rights that define as a subject to prevent the abuse The fair treatment for the shareholders P a g e | 87 An effective framework for the corporate governance need to make certain the fair treatment for all shareholder (includes minority and foreign shareholders), for the opportunity to remedy the violation of their rights In addition, there is a need of equitable treatment of voting, receiving the information for all shareholder in any class or any situation Especially, the abuse of insider trading or self-dealing need to be prohibited in corporate governance frameworks The last but least, the executive board required to reveal the any matter that can directly or indirectly affect the corporation The right of stakeholders The OECD principles (OECD 2004) noticed that the corporate governance framework should admit the rights of stakeholders by law or through mutual meeting agreement It also encourages the active co-operation between corporations and stakeholder by establishing wealth, jobs, and the sustainability Furthermore, the companies should constitute the best condition for stakeholders to participate in the corporate governance process Disclosure and transparency On the point of OECD principles (OECD 2004), an exercise of good corporate governance have to concern the disclosure and transparency for all the material issue which related with the corporation It means that the information will be come out as clear as it can The material issue include the financial situation, the firm performance, ownership structure, and the governance mechanism of the company As a result, there is a need of assuring the timely and accurate disclosure for the company information P a g e | 88 Appendix D This table describes the sample by dividing the sample in two groups which is family and non-family business The depicted graphics are in the appendix Non-family Variable Mean Min Max The corporate governance feature Board size 5.8171 4.0000 11.0000 Duality 0.2378 0.0000 1.0000 Diversity 0.1343 0.0000 0.6000 Outside director 0.1555 0.0000 0.8330 Director over 60s 0.0919 0.0000 0.6000 Foreign ownership 0.1191 0.0000 0.7248 The financial factors Total asset 2237.3270 75.6610 50378.9000 Capital expenditure 0.0529 0.0000 0.5920 Debt 0.1420 0.0000 0.6890 Growth in sale 0.0019 -0.0092 0.1146 Firm performance Tobin’s q 1.0903 0.1016 5.2985 ROA 6.6530 -19.9800 74.2600 Z-score 8.2633 -18.3450 75.4280 The strategic risk Unsystematic risk 0.1241 0.0300 2.0800 Systematic risk 0.0014 -0.0009 0.0160 Source: Authors’ analysis P a g e | 89 Mean Family Min Max 5.9440 0.4800 0.1748 0.1411 0.1210 0.0978 3.0000 0.0000 0.0000 0.0000 0.0000 0.0000 11.0000 1.0000 0.8000 0.6000 0.6000 0.4920 2992.1630 0.0418 0.1200 0.0026 99.2290 0.0000 0.0000 -0.0095 75772.6000 0.8770 0.9210 0.1146 1.0739 3.4212 5.0843 0.0148 -19.1800 -17.8180 12.6580 28.4500 29.7390 0.1323 0.0015 0.0320 -0.0023 0.5760 0.0051 Appendix E This table describes the sample by dividing the sample in two groups which is founding family and non-founding family business The depicted graphics are in the appendix Non-founding family Founding family Variable Mean Min Max Mean Min Max The corporate governance feature Board size 5.7437 3.0000 11.0000 6.1556 4.0000 11.0000 Duality 0.2714 0.0000 1.0000 0.5000 0.0000 1.0000 Diversity 0.1337 0.0000 0.6000 0.1919 0.0000 0.8000 Outside director 0.1560 0.0000 0.8330 0.1343 0.0000 0.6000 Director over 60s 0.1002 0.0000 0.6000 0.1139 0.0000 0.6000 Foreign ownership 0.1076 0.0000 0.7248 0.1147 0.0000 0.4920 The financial factors Total asset 2126.2100 75.6610 50378.9000 3531.4010 99.2290 75772.6000 Capital expenditure 0.0498 0.0000 0.5920 0.0443 0.0000 0.8770 Debt 0.1323 0.0000 0.6890 0.1329 0.0000 0.9210 Growth in sale 0.0027 -0.0095 0.1146 0.0012 -0.0088 0.0343 Firm performance Tobin’s q 1.0522 0.1016 5.2985 1.1512 0.0148 12.6580 ROA 6.2549 -19.9800 74.2600 3.0359 -12.5100 23.1500 Z-score 7.8482 -18.3450 75.4280 4.7565 -11.0310 24.8500 The strategic risk Unsystematic risk 0.1224 0.0300 2.0800 0.1395 0.0320 0.5760 Systematic risk 0.0014 -0.0009 0.0160 0.0016 -0.0023 0.0051 Source: Authors’ analysis P a g e | 90 Appendix F This table describes the sample by dividing the sample in two groups which is family CEO and non-family CEO business The depicted graphics are in the appendix Non-family CEO Family CEO Variable Mean Min Max Mean Min The corporate governance feature Board size 5.8150 4.0000 11.0000 5.9569 3.0000 Duality 0.2312 0.0000 1.0000 0.5086 0.0000 Diversity 0.1391 0.0000 0.8000 0.1707 0.0000 Outside director 0.1495 0.0000 0.8330 0.1488 0.0000 Director over 60s 0.0985 0.0000 0.6000 0.1134 0.0000 Foreign ownership 0.1209 0.0000 0.7248 0.0933 0.0000 The financial factors Total asset 2302.3220 75.6610 50378.9000 2953.7960 127.2290 Capital expenditure 0.0497 0.0000 0.8770 0.0457 0.0000 Debt 0.1368 0.0000 0.9210 0.1259 0.0000 Growth in sale 0.0020 -0.0092 0.1146 0.0025 -0.0095 Firm performance Tobin’s q 1.0820 0.0148 5.2985 1.0849 0.2305 ROA 6.4483 -19.9800 74.2600 3.4463 -19.1800 Z-score 8.0872 -18.3450 75.4280 5.0712 -17.8180 The strategic risk Unsystematic risk 0.1140 0.0300 0.5750 0.1479 0.0320 Systematic risk 0.0014 -0.0009 0.0051 0.0016 -0.0023 Source: Authors’ analysis P a g e | 91 Max 11.0000 1.0000 0.7500 0.8000 0.5000 0.4920 75772.6000 0.5920 0.6760 0.0981 12.6580 31.2300 33.5280 2.0800 0.0160 ... the freestanding family owned firms have a similar market performance with other firms Also, Isakov and Weisskopf (2014) presented that family firms can even be more profitable and these firms exhibit... strategic risk, family s effects, and firm performance 59 4.3.1 The strategic risk, family s involvement, and performance 59 4.3.2 The strategic risk, founding family, and performance ... strategic risk, family s effect and firm performance 28 2.3.3.1 The strategic risk and firm performance 28 2.3.3.2 The idiosyncratic (unsystematic) risk, family and firm performance 29
- Xem thêm -

Xem thêm: Family ownership, strategy risks and firms performance , Family ownership, strategy risks and firms performance

Gợi ý tài liệu liên quan cho bạn

Nhận lời giải ngay chưa đến 10 phút Đăng bài tập ngay