No abstract

<p>Under the impact of the global financial crisis, firms experience more external financial constraints and this is a good opportunity to investigate dividend smoothing and signaling behavior. Using data from the US market where the crisis originates and five Southeast Asian markets which are slightly affected by the crisis, we find that US firms pursue dividend smoothing model and they also follow signaling theory by increasing dividends in the post-crisis period to earn good reputation. However, Malaysia, Philippines and Indonesia following dividend smoothing model fail to pay more dividends in the post-crisis period. Thailand and Singapore increase dividend payments in the post-crisis period but they fail to pursue the dividend smoothing model significantly.</p>

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. JEL Classifications: M1, G34

PurposeThe paper investigates the effect of corruption on corporate investment efficiency around the world.Design/methodology/approachThe sample includes 218,350 observations from 30,074 firms across 42 countries. The authors measure corruption based on the Corruption Perception Index (CPI) from Transparency International, Corruption Control Index (CCI) from the World Bank and Corruption Index from the International Country Risk Guide.FindingsThe authors find that corruption is negatively related to investment efficiency. The robustness checks with different measures of corporate investment and alternative regression approaches show consistent findings. Moreover, the authors also find that the effect of corruption is stronger (weaker) in strong (weak) shareholder protection countries.Originality/valueThe paper has two important contributions to the literature. First, it shows that corruption environment is also a determinant of corporate investment efficiency. Second, legal protection of shareholders can mitigate the negative effect of corruption on corporate investment efficiency.

Vietnam is a promising laboratory to examine the effect of monetary loosening policy on corporate dividend decisions due to the following reasons: (1) Vietnamese government conducts monetary loosening policy continuously between 2007 and 2017; (2) the monetary policy relies mainly on money supply; and (3) credit channel is the dominant monetary transmission channel. With a research data including 4,493 observations from 2008 to 2017, we find that both the choice to pay dividends and dividend payout ratio are positively affected by money supply and this effect is mitigated by corporate cash holdings. In addition, money supply is positively related to speed of dividend adjustment.

Prior research shows that firms restrict their dividend policy due to precautionary motives when they face high uncertainty and external financial constraint during a financial crisis. However, the effect of a financial crisis on dividend policy may also be explained by the bird in hand mechanism. This paper investigates how the global financial crisis affects corporate dividend policy in the Vietnamese stock market. We choose this emerging market since its weak corporate governance environment strengthens shareholders’ bird in hand motive. With a sample of 5,489 observations between 2007 and 2017, we find that both the probability of dividend payment and dividend payout ratio are higher during the crisis period of 2008-2009. The effect of the financial crisis is weaker in firms with high leverage and large size. Moreover, our findings show that the likelihood of dividend omission is lower while the probability of dividend initiation and dividend increase is higher during the financial crisis.

The extant literature shows that the effects of CEO duality and state shareholder on the sensitivity of management turnover to firm performance are mixed. Using a sample of 1,260 firm-year observations from 226 firms listed in Vietnam from 2009 to 2015, we find supporting evidence for manager turnover mechanism. Interestingly, research results show that the negative relationship between firm performance and CEO turnover is weaker when CEOs simultaneously holds chairman positions. These findings imply that the separation of CEO and chairman positions is necessary to enhance corporate governance. JEL Classifications: M12, G34

The literature shows that the relationship between state ownership and corporate investment is debatable. This study examines this relationship in Vietnam as a transitional economy. Our sample consists of 4,680 observations from 2009 to 2020. Using fixed effects and random effects for panel data, random effects Tobit, and pooled OLS, we find that state ownership decreases investment expenditures. Moreover, this negative impact is stronger if the firms are financially unconstrained. Our results indicate that weak corporate governance and soft budget constraints arising from state ownership may fail to determine investment decisions. A government’s negative attitude toward risk and conservatism may effectively affect corporate investment.