Ảnh hưởng các đặc điểm của Giám đốc điều hành đến chất lượng báo cáo tài chính, tác động đến hiệu quả đầu tư của các công ty niêm yết trên thị trường chứng khoán Việt Nam. Ảnh hưởng các đặc điểm của Giám đốc điều hành đến chất lượng báo cáo tài chính, tác động đến hiệu quả đầu tư của các công ty niêm yết trên thị trường chứng khoán Việt Nam. Ảnh hưởng các đặc điểm của Giám đốc điều hành đến chất lượng báo cáo tài chính, tác động đến hiệu quả đầu tư của các công ty niêm yết trên thị trường chứng khoán Việt Nam. Ảnh hưởng các đặc điểm của Giám đốc điều hành đến chất lượng báo cáo tài chính, tác động đến hiệu quả đầu tư của các công ty niêm yết trên thị trường chứng khoán Việt Nam. Ảnh hưởng các đặc điểm của Giám đốc điều hành đến chất lượng báo cáo tài chính, tác động đến hiệu quả đầu tư của các công ty niêm yết trên thị trường chứng khoán Việt Nam. Ảnh hưởng các đặc điểm của Giám đốc điều hành đến chất lượng báo cáo tài chính, tác động đến hiệu quả đầu tư của các công ty niêm yết trên thị trường chứng khoán Việt Nam. Ảnh hưởng các đặc điểm của Giám đốc điều hành đến chất lượng báo cáo tài chính, tác động đến hiệu quả đầu tư của các công ty niêm yết trên thị trường chứng khoán Việt Nam. Ảnh hưởng các đặc điểm của Giám đốc điều hành đến chất lượng báo cáo tài chính, tác động đến hiệu quả đầu tư của các công ty niêm yết trên thị trường chứng khoán Việt Nam. Ảnh hưởng các đặc điểm của Giám đốc điều hành đến chất lượng báo cáo tài chính, tác động đến hiệu quả đầu tư của các công ty niêm yết trên thị trường chứng khoán Việt Nam. Ảnh hưởng các đặc điểm của Giám đốc điều hành đến chất lượng báo cáo tài chính, tác động đến hiệu quả đầu tư của các công ty niêm yết trên thị trường chứng khoán Việt Nam. Ảnh hưởng các đặc điểm của Giám đốc điều hành đến chất lượng báo cáo tài chính, tác động đến hiệu quả đầu tư của các công ty niêm yết trên thị trường chứng khoán Việt Nam.MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY THE EFFECTS OF CHIEF EXECUTIVE OFFICER CHARACTERISTICS ON FINANCIAL REPORTING QUALITY, IMPACT ON INVESTMENT EFFICIENCY OF LI.
MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY - THE EFFECTS OF CHIEF EXECUTIVE OFFICER CHARACTERISTICS ON FINANCIAL REPORTING QUALITY, IMPACT ON INVESTMENT EFFICIENCY OF LISTED COMPANIES ON VIETNAM STOCK EXCHANGE SUMMARY OF THE THESIS HO CHI MINH CITY – 2023 The Thesis is prepared at: University of Economics Ho Chi Minh City Thesis supervisor: Reviewer 1: Reviewer 2: Reviewer 3: The thesis will be presented to the Thesis Board at the University of Economics Ho Chi Minh City At…….hours…… day…….month………year……… This Thesis can be found at the library of University of Economics Ho Chi Minh City LIST OF RESEARCH WORKS OF AUTHOR LIST OF RESEARCH WORKS OF AUTHOR Nguyen Thi Kim Cuc & Nguyen Thi Kim Loan, 2021 Financial reporting quality and investment efficiency of listed companies on Vietnam Stock Exchange: The moderating role of female CEOs AsiaPacific Economic Review, April 2021 issue (586), ISSN 0868 -3808, 48 -50 Nguyen Thi Kim Loan & Nguyen Van Bao, 2021 Examining the satisfaction of financial statement information users: Evidences in Vietnam Accounting & Auditing Review, April 2021 issue (211), 57 63 Ha Thi Thuy & Nguyen Thi Kim Loan, 2021 Impact of CEO duality and power on corporate financial performance: Evidence of listed companies on Vietnam Stock Exchange Ho Chi Minh City University of Economics and Finance Ha Thi Thuy & Nguyen Thi Kim Loan, 2021 Influence of CEO duality on financial performance of listed companies on Vietnam stock market: The moderating role by CEO power Asia-Pacific Economic Review, June 2021 issue, ISSN 0868 -3808, 62 -64 Nguyen Thi Kim Cuc & Nguyen Thi Kim Loan, 2022 Financial reporting quality and investment efficiency: The moderating role of female CEO The 10th International Conference On Emerging Challenges: Strategic adaptation in the world of uncertainties INTRODUCTION The necessity of the topic Each enterprise has policies to attract investment capital from different sources, this is done by the policies in the internal governance mechanism Investment can be understood as a decision to spend current money to buy real or financial assets to increase income Therefore, enterprises can use their resources to invest in projects with positive net present value or abandon projects with negative net present value to grow and scale better in the future Non-optimal investment means over-investing or under-investing Ideally, a perfect market is free from asymmetric information between managers and outside investors Companies can invest in optimizing profitable projects and recover capital from inefficient ones However, enterprises face disadvantages and financial difficulties (Fazzari et al., 1987) that prevent their selection of effective investment projects Therefore, firms with abundant and diverse financial resources are more likely to over-invest, while firms with limited financial resources are more likely to under-invest (Myers, 1977; Jensen, 1986) It is a matter of increasing empirical research not only in developed countries but also in emerging countries to help managers in making policies as well as setting goals and strategies for their management context One of the factors that affect investment efficiency is the quality of financial reporting Usually, Biddle et al (2009) state that companies with high-quality financial reporting can help management reduce adverse selection and moral hazards, as well as allow them to better identify investment opportunities Besides, it also minimizes information asymmetry between enterprises and external capital providers by improving the role of supervision and capital management of investors (Chen et al., 2011) The recent increase in academic research on the role of the Chief Executive Officer (CEO) in corporate governance also demonstrates the importance of corporate governance mechanisms The CEO characteristics are an important factor in determining financial reporting results (Habib and Hossain, 2013) Although the CEO is not directly involved in the preparation of financial statements, they will put pressure on the Chief Financial Officer (CFO) to participate in the manipulation of accounting information to satisfy or evaluate beat market expectations (Dechow et al., 2010) Additionally, CEOs are also very interested in accounting and profit metrics in particular because their clearing preferences are closely tied to reported earnings (Dechow et al., 2010) Besides, the investment decision is related to the management characteristics of the CEO (Bhuiyan and Hooks, 2019) Therefore, the timing of investment decisions depends not only on governance factors but also on the CEO characteristics In fact, in recent years, Vietnam's system of accounting and auditing standards has gradually built up a legal framework by international accounting and auditing standards to improve and enhance the financial reporting quality Several previous domestic studies have suggested that high-quality financial reporting increases investment efficiency (Tran Thi Thuy Linh et al., 2015; Nguyen Ngoc Quynh, 2017) The results of these studies can help managers understand the role of financial reporting quality on the investment efficiency However, studying the simultaneous impact of CEO characteristics on financial reporting quality, especially the impact of financial reporting quality on investment efficiency with moderating role by CEO characteristics have not received much attention from previous researchers Therefore, the author believes that the study affects CEO characteristics, financial reporting quality on investment efficiency (including underinvestment or overinvestment), and the influence of financial reporting quality on investment efficiency with moderating role by CEO characteristics of listed companies in Vietnam are very recent and necessary Specifically, this new exploratory study examines whether the moderating role of CEO characteristics improve the impact of financial reporting quality on investment efficiency Therefore, the author choose the topic “The influence of Chief executive officer characteristics on financial reporting quality, impact on investment efficiency of listed companies on Vietnam Stock Exchange” Research objective Overall goal: the thesis examines the influence of CEO characteristics on financial reporting quality and investment efficiency; examines the influence of financial reporting quality on the investment efficiency of listed companies; At the same time, explores and tests the influence of financial reporting quality on investment efficiency by moderating role of CEO characteristics of listed companies on Vietnam Stock Exchange Research questions Question 1: Do CEO characteristics affect the financial reporting quality of listed companies and how does the influence of each CEO characteristics on each financial reporting quality measurement model? Question 2: Do CEO characteristics affect the investment efficiency of listed companies and how does the influence of each CEO characteristics on investment efficiency? Question 3: Does the financial reporting quality affect the investment efficiency of listed companies and what is the impact of each financial reporting quality measurement model on investment efficiency? Question 4: Does financial reporting quality affect investment efficiency when moderated by CEO characteristics and how is the influence of financial reporting quality on investment efficiency with moderating role by CEO characteristics shown? 4 Subjects and scope of the research 4.1 Research subjects The research object of the thesis is the influence of a CEO characteristics on the financial reporting quality and; the impact on the investment efficiency of companies listed on the Vietnam stock market 4.2 The scope of research Research space scope: Research conducted in Vietnam includes nonfinancial companies listed on Ho Chi Minh Stock Exchange (HOSE), Hanoi Stock Exchange (HNX) Scope of research period: Study using data from 2015 to 2020 Scope of research content: The study analyzes the influence of CEO characteristics on the quality of financial statements of listed companies, the influence of CEO characteristics on investment efficiency, and the influence of quality financial reporting on investment performance under the influence of CEO characteristics Scope of research content: The study analyzes the influence of CEO characteristics on financial reporting quality and investment efficiency; the influence of financial reporting quality on investment efficiency with moderating role of CEO characteristics Research methodology The author uses a mixed research method: qualitative research methods and quantitative research methods In the first stage, the author uses qualitative research methods through expert interviews and collects, analyzes, and synthesizes the opinions of experts The objective of this stage is the basis for the author to determine the existence of relationships of the variables in the research model, specifically affecting the CEO characteristics to the financial reporting quality and investment efficiency, the influence of financial reporting quality on investment efficiency and the influence of financial reporting quality on investment efficiency with the moderating of CEO characteristics On that basis, help the author strengthen the research problem to propose hypotheses and research models In the next stage, the author uses the quantitative research method The author collects secondary data, using Stata software as a data analysis tool Includes the following steps: Firstly, the author uses the method of least squares (Ordinary Least Square - OLS) four models to measure the financial reporting quality, and the model to measure investment efficiency to find the residual value of each model to support the next step is the general model regression Second, the author uses the Multinomial logistic regression model to test hypotheses and research models (1) the influence of CEO characteristics on financial reporting quality; (2) the influence of CEO characteristics on investment efficiency; (3) the influence of financial reporting quality on investment efficiency, and (4) The influence of financial report quality on investment efficiency with moderating role of CEO characteristics Finally, based on the experimental results, the author conducts a discussion of the research finding as a basis for conclusions to make management implications The thesis’ contribution 6.1 Theoretical contributions First of all, this is the first study to model the influence of financial reporting quality on the investment efficiency of listed companies in Vietnam with moderating role of CEO characteristics In addition, this study contributes to clarifying the concept and measurement model of financial reporting quality, CEO characteristics, and investment efficiency measurement models of listed companies in Vietnam, based on the adoption of previous research in the world Next, the results of this thesis suggest that even in a transitional country like Vietnam, where the mechanism for appointing CEOs is very different, CEOs have operational goals other than maximizing shareholder value This result adds some new empirical evidence for the influence of financial reporting quality on investment efficiency with moderating role of CEO characteristics, especially the impact of the CEO female, CEO tenure, and CEO’s financial and accounting expertise In addition, adding to the line of research by upper echelon theory, stewardship theory, signal theory, and agency theory in verifying the relationship between CEO characteristics and financial reporting quality At the same time, there are financial and non-financial incentives for experienced CEOs that motivate them for benefit of their organization, and it is the built reputation and tenure increase that drives the CEO to maintain financial reporting quality and improve investment efficiency On the other hand, as a corollary, agency theorists argue that separating the two roles increases the independence of the board by providing control, monitoring, and balancing effects for management behavior By signaling to improve the financial reporting quality to signal market trends and encouraging investors more attention to capital allocation, thereby influencing investment decisions Finally, this thesis has demonstrated that manager decisions depend on some of their characteristics and can lead to imbalances in firm investment efficiency, especially over-investment From there, the results of the thesis will have useful values that scientists can refer to for future research and development, especially in emerging markets like Vietnam 6.2 Practical contributions This thesis contributes to the Vietnamese stock markets and supports other emerging market research examining the benefits of improved financial reporting quality Therefore, desirable for Vietnam to actively improve its market infrastructure, specifically apply an accounting standard that is suitable for practice, encourage better information disclosure, and also enhance the role of financial institutions enforcement agencies At the micro level, tighter oversight mechanisms are needed to improve the quality of financial reporting and make better allocations of capital and resources, which can lead to higher social welfare Furthermore, the findings provide a signal for the board to have a more effective policy mechanism in their system of administering incentive programs such as incentives and fixed performance-based fixed and variable compensation Governance mechanisms and measures reduce the CEO's power on the board In addition, the research could potentially be useful to shareholders, investors, regulators, and policymakers to help further improve institutional investment performance Structure of the thesis Chapter 1: Research overview Chapter 2: Theoretical basis Chapter 3: Research methodology Chapter 4: Research results Chapter 5: Conclusion and implications 13 incentive and responsibility to increase recognition from shareholders and the board of directors Therefore, when the governance structure gives them the highest self-determination and authority, CEOs are the most profitable leaders (Fama, 2012) Furthermore, the upper echelon theory also explains the relationship between CEO characteristics and firm performance is also different because it depends on the CEO characteristics (Kiel and Nicholson, 2003) These theories also suggest that the board of directors, especially the CEO, may play an important role in improving the company's overall performance 2.2.3 Financial reporting quality Financial reporting not only represents the financial or non-financial information of the company as required by any regulatory authority but also serves as a means of communication between the company and its stakeholders, such as creditors, investors, and analysts Therefore, financial reporting is viewed as a lens for assessing business conditions and communicating information for financial decisions such as capital expenditures and the use of idle funds for lending activities by companies (Williams, 2008) The financial reporting quality can be assessed from the point of view of two groups, specifically for the needs of users, which focuses on valuation issues, and for the group of shareholder protection views, which focuses on corporate governance issues (Jonas and Blanchet, 2000) From a user's perspective, the financial reporting quality relates to the decision-making usefulness of the information From a shareholder's perspective, the financial reporting quality depends on full and fair disclosure to owners 2.2.4 Investment efficiency Investment efficiency is the fact that firms use resources to implement projects with positive NPV (Li and Wang, 2010) An investment is expected to provide positive added value, that is, the NPV of the future cash flows generated is greater than the cost (Finnerty and Emery, 2016) Therefore, when a project with little deviation from the 14 expected investment amount is selected, it is called under-investment or over-investment (Biddle et al., 2009) Information asymmetries can result in decisions that lead to deviations from optimal investment levels That is, accept a project with a negative NPV or reject a project with a positive NPV or conflicting approval costs among management, shareholders, and creditors (McNichols and Stubben, 2008) Financial reporting is one of the factors affecting investment activities, and useful information for both internal and external people Therefore, high financial reporting quality will be associated with benefits between shareholders and managers, increasing a company's investment efficiency (McNichols and Stubben, 2008) 1.3 Research background 1.3.1 Overview of Vietnam's economic history 1.3.2 Overview of the stock market in Vietnam 1.3.3 Overview of financial reporting quality and information disclosure on the stock market and investment activities in Vietnam 2.4 Background theories 2.4.1 Agency theory 2.4.2 Stewardship Theory 2.4.3 Signaling Theory 2.4.4 Upper Echelon Theory 2.5 Theoretical framework of the influence CEO characteristics on financial reporting quality 2.6 Theoretical framework of the influence CEO characteristics on investmen efficiency 2.7 Theoretical framework of the influence of financial reporting quality on investment efficiency with moderating of CEO characteristics 2.8 Conclusion of chapter 15 CHAPTER 3: RESEARCH METHODOLOGY 2.4 Introduction 2.5 Development of research hypotheses 3.2.1 Influence of CEO characteristics on financial reporting quality H1: CEO characteristics positively influence financial reporting quality H1a CEO age has a positive influence on the financial reporting quality H1b Female CEO has a positive influence on the financial reporting quality H1c CEO tenure has a positive influence on the financial reporting quality H1d The CEO’s financial and accounting expertise has a positive influence on the financial reporting quality H1e The CEO duality has a positive effect on the financial reporting quality 3.2.2 Influence of CEO characteristics on investment efficiency H2 CEO characteristics have a positive influence on investment efficiency (including over-investment and under-investment) H2a CEO age has a positive influence on investment efficiency H2b Female CEO has a positive influence on investment efficiency H2c CEO tenure has a positive influence on investment efficiency H2d The CEO’s financial and accounting expertise has a positive influence on investment efficiency H1e The CEO duality has a positive influence on investment efficiency 3.2.3 The financial reporting quality improves investment efficiency H3 The financial reporting quality improves the investment efficiency H3a Financial reporting quality improves over-investment H3b Financial reporting quality improves under-investment 3.2.4 Influence of financial reporting quality on investment efficiency with moderating role of the CEO characteristics H4 Financial reporting quality improves investment efficiency with moderating the role of CEO characteristics 16 H4a Financial reporting quality improves investment efficiency with moderating the role of the CEO's age H4b Financial reporting quality improves investment efficiency with moderating the role of female CEO H4c Financial reporting quality improves investment efficiency with moderating the role of CEO tenure H4d Financial reporting quality improves investment efficiency with moderating the role of the CEO’s financial and accounting expertise H4e Financial reporting quality improves investment efficiency with moderating the role of the CEO duality 3.3 Research methods and research process 3.4 Qualitative research methods 3.4.1 Design process for qualitative research 3.4.2 Research methodology and qualitative data collection tools 3.4.3 Methods for collecting and analyzing qualitative data 3.4.4 Proposing a formal research model The influence of financial reporting quality on investment efficiency InvEff i, t =β 0+ β FRQ i ,t + β Tang i ,t + β Debt i ,t + β CF i ,t + β MTBi ,t + β FC The influence of financial reporting quality on investment efficiency with moderating role of the CEO characteristics InvEff i, t =β 0+ β FRQ i ,t + β Characteristicsi , t + β FRQ i ,t∗Characteristics 3.1 Quantitative research methods 3.1.1 Quantitative research process 3.1.2 Data collection and sample selection 3.1.3 Measure investment efficiency variable (InvEff ) The legacy study continues to use the model of Biddle et al (2009) to estimate the expected investment efficiency for company i in year t based on the salegrowth Invesment i ,t =β 0+ β1 SaleGrowthi ,t −1+ ε i , t (3) 3.1.4 Measuring the financial reporting quality variable 3.1.4.1 Accruals quality 17 The author uses the model of Dechow and Dichev (2002), modified from the basic model of Jones (1991) WCA i ,t =β 0+ β CFOi ,t −1+ β2 CFOi ,t + β CFOi , t +1+ β ∆ R i ,t + β PPEi , t +ε i , 3.1.4.2 Accounting conservatism The author uses the model of Jones (1991) TACC i ,t ∆ Revi , t PPE i ,t =α +α + α3 +ε ( ) Asset i ,t −1 Asset i ,t −1 Asset i , t−1 Asset i ,t −1 i , t 3.1.4.3 Earning smoothness Based on the earning smoothness measurement model of Francis et al (2005) ESi , t= σ (Prof ¿ ¿i , t) ¿ σ (CFO¿¿ i ,t )( 6)¿ 3.1.4.4 Earning value relevance Using the model of Francis et al (2005) RV i , t= β1 EPS i , t ∆ EPS i ,t + β2 +ε i ,t (7) Pi ,t −1 Pi , t−1 3.1.4.5 Financial Reporting Quality Index The average financial statement quality index (FRQ_index) is calculated by calculating the average price by standardizing how each component of the four models is measured 3.1.5 Measurement the CEO characteristics variable 3.1.5.1 CEO age ( Age ): The CEO's age during his time in a management role at the company 3.1.5.2 Female CEO ( Female ) If the CEO is female, the value is 1, otherwise it is 3.1.5.3 CEO tenure ( Tenure ) : The number of years the CEO has served in this position at the company 3.1.5.4 CEO's financial and accounting qualification(Edu): ... quality 1.2.4 Study on the influence of CEO’s financial and accounting expertise on the financial reporting quality 1.2.5 Study on the influence of CEO duality on the financial reporting quality... of the CEO duality 3.3 Research methods and research process 3.4 Qualitative research methods 3.4.1 Design process for qualitative research 3.4.2 Research methodology and qualitative data collection... companies on Vietnam Stock Exchange Ho Chi Minh City University of Economics and Finance Ha Thi Thuy & Nguyen Thi Kim Loan, 2021 Influence of CEO duality on financial performance of listed companies