State-Owned Holding Company and Value of Cash Holdings in Vietnam

Authors

  • Thong Tien Nguyen Ho Chi Minh City University of Foreign Languages – Information Technologies

DOI:

https://doi.org/10.33736/ijbs.5175.2022

Keywords:

Corporate Governance, State-Owned Holding Company, Ownership Structure, Cash Holdings, Value of Cash Holdings

Abstract

Ownership structure, which specifies the owners of the firm, is crucial to corporate governance as it one of the foundation explanation sources of agency conflicts. Roles and impacts of different corporate owners on corporate governance have been studied worldwide, but are not as popular for the role of a State-Owned Holding Company (SOH) as a model of state capital investment agency. This study examines the role of SOH in the management and governance of listed companies with state capital in Vietnam through cash holdings models. SOH-linked companies (SLCs) are found to hold more cash and the shareholders appreciate the cash hold by the SLCs as robust to the firms’ characteristics. SOH ownership significantly increases the value of cash holding, and the better value of cash holdings in SLCs is supposed to be a result coming from good corporate governance. This study contributes to the literature of ownership structure and corporate governance and provides evidence for SOH as a positive ownership and monitoring mechanism in improving corporate governance and firm performance in companies with state-owned capital in Vietnam.

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Published

2022-12-19

How to Cite

Thong Tien Nguyen. (2022). State-Owned Holding Company and Value of Cash Holdings in Vietnam. International Journal of Business and Society, 23(3), 1462–1481. https://doi.org/10.33736/ijbs.5175.2022