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Do foreign shareholders improve corporate earnings quality in emerging markets? Evidence from Vietnam

Year: 2019

Type: article

Abstract: Employing a panel dataset of Vietnamese non-financial listed firms, we find that firms with greater foreign shareholdings are aligned with higher quality of financial disclosure. More specially, we find that greater foreign shareholdings are associated with (i) lower earnings management; (ii) more persistent earnings; and (iii) higher informative earnings. On the ground that foreign investors in Vietnam equity market are dominated by institutional investors, the finding from this study supports the spillover hypothesis. This suggests that foreign institutional shareholders with extensive management skills might have ability to assist their invested firms in improving quality of reported earnings.

Source: Cogent Economics & Finance

DOI: 10.1080/23322039.2019.1698940

Authors: Xuan Vinh Vo, Thi Kim Huong Chu

Institutions: University of Economics Ho Chi Minh City, Viện Nghiên cứu kinh doanh

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: gold

Estimated APC paid: $1,165