A tale of two cities: Economic development, corporate governance and firm value in Vietnam

摘要

Highlights•The levels of financial and economic development moderate the relation between corporate governance and firm value..•The relation between corporate governance and firm value depends on listing location.•The benefits of adopting good corporate governance practices are enhanced by the levels of financial and economic development.AbstractThis study examines the moderating effect of financial and economic development on the relation between corporate governance and firm value in Vietnam, which has two exchanges, one located in the business center in the South, and the other located in the center of government in the North. This unique setting allows an investigation of corporate governance dynamics controlling for legal jurisdiction. The results show a positive relation between corporate governance and firm value in Ho Chi Minh City but not in Hanoi. The finding suggests that financial and economic development play critical roles in enhancing the benefits of corporate governance in emerging markets.