Asymmetric information, corporate governance and performance in Vietnamese commercial banks

MINISTRY OF EDUCATION AND TRAINING

NATIONAL ECONOMICS UNIVERSITY

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NGUYEN MANH HA

INFORMATION ASYMMETRY, CORPORATE GOVERNANCE AND PERFORMANCE AT VIETNAMESE COMMERCIAL BANKS

Major: Business Administration Code: 62340102

DOCTORAL THESIS

Scientific instructor:

1. DR. VU DINH HIEN

2. DR. LUONG THAI BAO

Hanoi - 2016

COMMITMENT

I have read and understand the academic integrity violations. I declare on my personal honor that this research is my own work and does not violate the requirements of academic integrity.

I hereby certify that the thesis topic “ Asymmetric information, corporate governance and performance at Vietnamese commercial banks ” is my own research work.

Hanoi, date month year 2016

Confirmation of PhD student's supervisor

Nguyen Manh Ha

ACKNOWLEDGEMENTS

First of all, I would like to sincerely thank the Board of Directors of National Economics University for creating favorable conditions for me to complete this thesis.

I would like to sincerely thank Dr. Vu Dinh Hien and Dr. Luong Thai Bao, my scientific supervisors, for helping me with the standards of content, knowledge and research methods to complete this thesis.

Finally, I would like to sincerely thank my family, friends, and colleagues.

has wholeheartedly supported and helped me throughout my studies and research.

Thank you very much everyone!

Author

Nguyen Manh Ha

INDEX

COMMITMENT i

ACKNOWLEDGEMENTS ii

LIST OF ABBREVIATIONS vii

LIST OF TABLES viii

LIST OF FIGURES ix

CHAPTER 1: GENERAL INTRODUCTION TO THE STUDY 1

1.1. Reasons for choosing topic 1

1.2. Research objectives of the thesis 2

1.3. Research question 2

1.4. Research object and scope 3

1.5. Research method 3

1.6. Results achieved by thesis 3

1.7. Thesis layout 3

1.8. Research model and proposed hypothesis 4

CHAPTER 2: THEORETICAL BASIS OF CORPORATE GOVERNANCE, INFORMATION ASYMMETRY AND PERFORMANCE OF COMMERCIAL BANKS 5

2.1. Overview of corporate governance 5

2.1.1. Definitions of corporate governance 5

2.1.2. The importance of corporate governance 6

2.1.3. Some corporate governance models in the world 7

2.1.4. Differences between corporate governance of banks and other companies 16

2.1.5. Theories of corporate governance and corporate governance scales 20

2.2. Overview of asymmetric information 28

2.2.1. Concept of asymmetric information 28

2.2.2. Forms of asymmetric information 30

2.2.3. The impact of asymmetric information 31

2.2.4. Studies on asymmetric information 34

2.2.5. Asymmetric information variable structure 37

2.3. Overview of bank performance and methods

measure 42

2.4. Overview of the relationship between asymmetric information, corporate governance and bank performance 46

2.4.1. The relationship between asymmetric information and banking performance 46

2.4.2. The relationship between corporate governance and asymmetric information 49

2.4.3. The relationship between corporate governance and bank performance 52

2.5. Research model and hypothesis 60

Chapter 3: RESEARCH METHODS 63

3.1. Research design 63

3.1.1. Research methods 63

3.1.2. Research sample of the thesis 64

3.2. Quantitative research 65

3.2.1. Research objectives 65

3.2.2. Research methods 65

SUMMARY OF CHAPTER III 71

CHAPTER 4: RESEARCH RESULTS 72

4.1. Overview of the current state of corporate governance at Vietnamese commercial banks 72

4.2. Descriptive statistics of banks whose research data were collected 77

4.2.1. Descriptive statistics on the characteristics of joint stock commercial banks research thesis 77

4.2.2. Descriptive statistics of independent variables are factors of corporate governance and testing the distribution form of independent variable scales 80

4.2.3. Descriptive statistics of dependent variables 84

4.3. Testing the correlation coefficient between corporate governance variables and asymmetric information variables and between asymmetric information variables and bank performance variables 86

4.3.1. Testing the correlation coefficient between variables of corporate governance

and the variable representing asymmetric information is the variable R&D 86

4.3.2. Testing the correlation coefficient between variables of corporate governance

and the variable representing asymmetric information is the variable Leverage 89

4.3.3. Testing the correlation coefficient between variables in corporate governance

and control variables with bank performance variables 91

4.3.4. Testing the correlation coefficient between variables representing asymmetric information and control variables with bank performance 94

4.4. Hypothesis testing and regression analysis to determine the relationship between corporate governance, asymmetric information and performance of banks 95

4.4.1. Results of regression analysis according to the first model of the impact of corporate governance factors on the representative variable of asymmetric information, R&D 96

4.4.2. The results of regression analysis according to the second model determine the impact of corporate governance factors on the representative variable of asymmetric information, Leverage 99

4.4.3. The results of regression analysis according to the third model determine the impact level of corporate governance factors and control variables on the performance of banks 102

4.4.4. Results of regression analysis according to the fourth model to determine the impact level of variables representing asymmetric information and control variables on the performance of banks 107

4.4.4. Summary of regression analysis results of 4 models 110

SUMMARY OF CHAPTER IV 114

CHAPTER 5: RECOMMENDATIONS 115

5.1. Recommendations for management activities at bank 115

5.2. Recommendations for the Board of Directors 116

5.3. Recommendations for Ownership 118

5.4. Recommendations for asymmetric information 118

5.5. Policy Recommendations 121

5.6. Recommendations for state management agencies 123

5.8. Limitations of the study and future research directions 125

CONCLUSION 126

REFERENCES 128