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Impact of Corporate Governance on Investment in SMEs Vietnam

Author

Listed:
  • Nguyen Thi Kim Chi
  • Bui Van Can
  • Bui Minh Duc

Abstract

Controlling the investment activities of company representatives helps to avoid inefficient investment activities. Shareholders will face with risks if manager¡¯s decisions which not bring benefits to shareholders (according to agency theory). Studying the influence of corporate governance on investment has an important role in controlling investment activities of enterprises. Therefore, the authors analyze the impact of corporate governance on investment of small and medium enterprises (SMEs) in Vietnam from 2014 to 2018. With data collected from 480 small and medium enterprises in Vietnam. The results show that state-owned enterprises tend to invest less than non-state enterprises. Companies with manager is board chair and manager hold shares will make investing more. Revenue growth and financial leverage have a positive impact on investment. From the results of this study, the authors also make some recommendations to help control investment activities in the enterprise through corporate governance characteristics.

Suggested Citation

  • Nguyen Thi Kim Chi & Bui Van Can & Bui Minh Duc, 2019. "Impact of Corporate Governance on Investment in SMEs Vietnam," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(11), pages 1-59, November.
    • Handle: RePEc:ibn:ijefaa:v:11:y:2019:i:11:p:59
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    References listed on IDEAS

    as
    1. He, Ying & Chen, Cindy & Hu, Yue, 2019. "Managerial overconfidence, internal financing, and investment efficiency: Evidence from China," Research in International Business and Finance, Elsevier, vol. 47(C), pages 501-510.
    2. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    3. Chen, Xin & Sun, Yong & Xu, Xiaodong, 2016. "Free cash flow, over-investment and corporate governance in China," Pacific-Basin Finance Journal, Elsevier, vol. 37(C), pages 81-103.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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