Impacts of the overall corporate governance on the cost of equity of non-financial companies listed on the Vietnam stock market
Published: July 27, 2026
Abstract
This study evaluated the impact of overall corporate governance on the cost of equity of 335 listed companies on the Vietnam stock market. The overall corporate governance was evaluated through an index consisting of typical corporate governance factors, including the Board of Directors (BOD), information disclosure, ownership structure, and audit committee. These factors are regulated by four variables, including company size, leverage, market-to-book value ratio, and industry index. The study's results showed that overall corporate governance has a negative impact on the cost of equity, and the study had some policy implications.
Keywords
cost of capitalcorporate governance indexnon-financial companiesstock marketaudit committee
References
1.
Aggarwal, R., Erel, I., Stulz, R. & Williamson, R. (2009). Differences in Governance Practices between U.S. and Foreign Firms: Measurement, Causes, and Consequences. The Review of Financial Studies, 22, 3131-3169.
2.
Ali Shah, S. Z. & Butt, S. A. (2009). The impact of corporate governance on the cost of equity: Empirical evidence from Pakistani listed companies. The Lahore Journal of Economics, 14, 139-171.
3.
Byun, H. Y., Kwak, S. K. & Hwang, L. S. (2008). The implied cost of equity capital and corporate governance practices. Korean Journal of Financial Studies (KJFS), 37, 139-184.
4.
Derwall, J. & Verwijmeren, P. (2007). Corporate governance and the cost of equity capital: Evidence from GMI's governance rating. European Centre for Corporate Engagement Research Note, 6, 1-11.
5.
Easton, P. D. (2004). PE ratios, PEG ratios, and estimating the implied expected rate of return on equity capital. The Accounting Review, 79(1), 73-95.
6.
Klapper, L. F. & Love, I. (2004). Corporate Governance, Investor Protection, and Performance in Emerging Markets. Journal of Corporate Finance, 10, 703-728.
7.
Mazzotta, R. & Veltri, S. (2012). The Relationship between Corporate Governance and the Cost of Equity Capital: Evidence from Italian Stock Exchange. Journal of Management & Governance, 2012, 1-27.
8.
Mazzotta, R. & Veltri, S. (2014). The relationship between corporate governance and the cost of equity capital: Evidence from the Italian stock exchange. Journal of Management & Governance, 18, 419-448.
9.
Salehi, M., Arianpoor, A. & Dalwai, T. (2020). Corporate Governance and Cost of Equity: Evidence from Tehran Stock Exchange. Journal of Asian Finance, Economics and Business, 7, 149-158.
10.
Srivastava, V., Das, N. & Pattanayak, J. K. (2019). Impact of corporate governance attributes on cost of equity. Managerial Auditing Journal, 34, 142-161.
11.
Zandi, G., Shahzad, I. A., Bajaber, N., Nowodziński, P. & Shahid, M. S. (2022). Relationship between corporate governance and cost of equity capital. Polish Journal of Management Studies, 26, 386-406.
