Examining the mediating influence of financial instrument disclosure in the relationship between foreign ownership and earnings per share of banks in Vietnam

Abstract

The paper examines the impact of foreign ownership on the earning per share (EPS) of banks with the mediating role of financial instrument disclosure (FID). The study utilizes a sample of 21 banks in Vietnam and employs multiple regression analysis with panel data spanning 15 years, from 2010 to 2024. Sobel-Goodman and Bootstrap tests are used to assess the mediating role of FID. The results show that the level of conformity with the requirements of International Financial Reporting Standard (IFRS 7) is about 56.8%. Preliminary results suggest foreign ownership positively influences financial instrument disclosure(FID), enhancing transparency and stakeholder confidence. Moreover, FID mediates the relationship between foreign ownership and earning per share, highlighting its role in bridging foreign investment and financial outcomes. In addition, educational attainment, and being publicly traded contribute to increasing the financial performance of banks, which is explained by the agency theory and the resource dependence theory. The research implications suggest that Vietnam should establish accounting standards for FID as soon as possible. Banks, in turn, need to implement appropriate accounting policies for FID to further contribute to improving financial performance.