(A thesis submitted in partial fulfilment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS, VIETNAM – THE NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS)
By Nguyen Thi Thanh An (VNP 21)
Academic Supervisor: Dr. Vo Hong Duc
Corporate governance is generally considered as a key factor for the operational success for enterprises. One of the most frequently discussed concepts among corporate governance factors is the ownership structure, particularly, managerial ownership. Various empirical studies have been conducted to examine the impact of diverse ownership structure aspects on firm’s performance. A measurement of managerial ownership includes direct ownership and indirect ownership to achieve the better measurement. In addition, managerial ownership should be treated as endogenous parameter and the relationship between managerial ownership and firm’s performance is non-monotonic. To deal with endogeneity issue, this study focuses on the effect of the change in managerial ownership on the change in firm’s performance. The result indicates that the actual managerial ownership level probably did not move toward the optimal level due to the existence of adjustment costs. Furthermore, managers are likely to sell their stocks when the entire financial market performed well. A reduction in managerial ownership has been impacted on ROA, but its provides the negative impact on firm’s performance regarding market evaluation
Keywords: Managerial ownership, Firm’s performance, Endogeneity, Market-based measurement, Accounting-based measurement.
Abbreviations: HOSE - Ho Chi Minh Stock Exchange; OLS – Ordinary Least Square; RE – Random Effect; FE – Fixed Effect; MO – Managerial Ownership; FP – Firm’s performance.
Full version is available at Library of Vietnam-Netherland Progamme: 1A Hoang Dieu, Phu Nhuan Dist, Ho Chi Minh city, Vietnam.