Ownership structure, accounting conservatism and firm performance: evidence from Vietnam

Abstract

The goals of this thesis are to investigate the influence of ownership structure on accounting conservatism and the benefits of accounting conservatism on firm performance in Vietnam context. The literature review shows that ownership structure has an effect on accounting conservatism and accounting conservatism also has a positive effect on the firm performance in countries around the world, however, the findings have not been consistent. In addition, there are a few studies that provide evidence on the relationship between ownership structure and accounting conservatism, especially ownership concentration, institutional ownership in the Vietnam context. Regarding the impact of accounting conservatism on the firm performance, there are limited studies on this issue until the time the thesis conducts the research in the Vietnam context. The research sample was selected from non-financial companies listed on the Ho Chi Minh City Stock Exchange in the period from 2012 to 2020. Data were collected from consolidated financial statements, annual reports, market prices and volume of trade are collected from the Ho Chi Minh City Stock Exchange. The panel data methodology is used to test the developed hypotheses. The thesis uses three popular methods to measure accounting conservatism: asymmetric timeliness (Basu, 1997), asymmetric timeliness score developed by Khan and Watts (2009) and accrual-based method developed by Ahmed and Duellman (2007). Accounting-based measures (Return on assets, return on equity), and marketbased measure (Tobin's Q, Stock liquidity) are adopted in this study to measure the firm performance. For ownership structure variable, it is classified into ownership concentration and ownership type. Ownership type consists of managerial ownership, institutional ownership, foreign ownership and state ownership. In respect of the effect of ownership structure on conservatism, the results display as expected. In particularly, higher institutional ownership, foreign ownership, state ownership leads to more conservatism; however, higher managerial ownership, ownership concentration leads to lower conservatism. Additionally, companies adopted more accounting conservatism principle are shown that the firm performance have better. The findings of this study contribute to the literature of ownership structure and accounting conservatism in the context of frontier market in Vietnam. This study also gives some useful implications for policymakers, practice of accounting, researchers, and users of accounting information in financial statements in Vietnam context.