The relationship between corporate governance, earnings management and stock price informativeness: empirical studies in a Vietnamese context
Author: Vuong, Phuong Thuy
Under the direction of: Isabelle Girerd-Potin et Nathalie Gonthier-Besacier
Grenoble Alpes University
English text
Keywords: Management science, Vietnam, Results management, Price informativeness, Corporate governance, Vietnamese, Mediator, Corporate governance.
Abstract
This thesis develops four empirical studies conducted in the Vietnamese context and related to corporate governance, earnings management (EM), insider trading and stock price informativeness (SPI). We measure EM through both accruals based earnings management (AEM) - with modified Jones and Kothari models - and real earnings manipulations (REM) through abnormal cash-flow from operations (REMCFO), overproduction (REMPROD), and discretionary expenses (REMDIS). In the first chapter related to “Ownership structure and earnings management”, we find that State ownership mitigates both AEM and REM through REMCFO. The results also show that foreign-owned firms are less engaged in AEM, whereas more foreign investors lead to more real manipulation through REMPROD and REMDIS. The second chapter focuses on the relation between board gender diversity and earnings management. Concerning AEM and with Kothari model, the results show that the presence of chairwomen reduces AEM but that more women on board of executives (measured both by their number and by the Shannon index) leads to more AEM. In terms of REM, more women measured by the Shannon index lead to more REMPROD. The third chapter investigates the role of insider trading as a mediator between corporate governance and EM. It proves this mediation effect only for State or foreign ownership and only when EM is measured by REMDIS. The last chapter contemplates the link between those corporate governance dimensions and SPI and the mediation effect on EM. It shows that women on boards, State and foreign ownership all increase SPI. Analyzing the mediating role of EM in these relationships gives mixed results. Our results have potential implications for Vietnamese policymakers to increase transparency and accountability to investors by improving corporate governance.
