Institutional Ownership and Corporate Performance Vietnamese Listed Enterprises

Abstract

The impact of ownership structure on corporate performance has become a subject of debate among many scholars. The research aims to investigate whether all types of institutional investors play an active and equal monitoring role in corporate performance based on market data and accounting data in Vietnamese listed enterprises. Due to the dynamic endogeneity of the effect of institutional ownership on firm performance, the dynamic panel generalized method of moments estimator is used for the analysis data for the period 2012 to 2023. The results showed that institutional ownership positively and strongly impacts firm performance based on both accounting and market data. However, only insensitive, large, domestic, and foreign institutional investors are active monitors and improve corporate performance. This study recommends that pressure-insensitive institutional shareholders, large institutions, domestic, and foreign organizations with close monitoring can help managers make sound strategic decisions in the business process, thereby improving firm performance. There is scant evidence on the role that institutional ownership plays in an emerging economy, such as Vietnam. This study examines the impact between institutional ownership and performance of listed enterprises in Vietnam and differentiates the impact of institutions according to their economic relationship with the investee companies, geographical origin, and ownership scale. Besides, this research applies to the method and tests on a previously unprocessed dataset.