Impact of Agency Costs on Firm Performance: Evidence from Vietnam
Impact of Agency Costs on Firm Performance: Evidence from Vietnam
Author(s): Le Duc Hoang, Tran Minh Tuan, Pham Van Tue Nha, Tran Phi Long, Ta Thu PhuongSubject(s): National Economy, Business Economy / Management, Micro-Economics, Accounting - Business Administration
Published by: Vilniaus Universiteto Leidykla
Keywords: agency cost; firm performance; leverage;
Summary/Abstract: An assumption in agency costs theory is that agency costs can exert a negative impact on firm performance. In this study, we examine the impact of agency costs on firm performance of Vietnamese listed companies. Our sample includes 736 companies in Vietnam during the period from 2010 to 2015. We find that agency costs exert a negative impact on firm performance. Our results are robust to alternative econometric models, including an instrumental variables technique and a system generalized method of moment model. In addition, we show that a debt instrument can be a useful tool to reduce the negative impact of agency costs on firm performance.
Journal: Organizations and Markets in Emerging Economies
- Issue Year: 10/2019
- Issue No: 20
- Page Range: 294-309
- Page Count: 16
- Language: English