Summary of doctoral dissertation finance banking transparency and information disclosure of listed companies on the vietnam stock market

MINISTRY OF EDUCATION AND TRAINING CANTHO UNIVERSITY SUMMARY OF DOCTORAL DISSERTATION Major: Finance-Banking Major code: 62340201 LE XUAN THAI TRANSPARENCY AND INFORMATION DISCLOSURE OF LISTED COMPANIES ON THE VIETNAM STOCK MARKET Can Tho, 2020 THE RESEARCH WAS COMPLETED AT CANTHO UNIVERSITY Supervisor : Assoc Prof Trương Đông Lộc The dissertation will be defended before the council of the school level at: ……hour to … hour , date month year 202 Opponent 1: Opponent 2: Learn about the dissertation in the library: - Learning Resource Center – CanTho University - Vietnam National Library LIST OF PAPERS REALTED TO THE DISSERTATION Le Xuan Thai and Truong Dong Loc, 2019 The Effects of Corporate Governance and Financial Factors on the Company’s Level of Transparency and Information Disclosure: Empirical Evidence from Vietnam’s Stock Market Journal of Trade Science, 130: 48-56 Le Xuan Thai and Truong Dong Loc, 2019 The Effect of Transparency and Disclosure on Cost of Equity of Listed Companies: Empirical Evidence from Ho Chi Minh Stock Exchange Journal of economics and development, 265: 66-74 Le Xuan Thai and Truong Dong Loc, 2019 The Effect of Transparency and Disclosure on Performance of Listed Companies on Ho Chi Minh Stock Exchange CanTho University Journal of Science, 55 (Economics): 23-30 Le Xuan Thai and Truong Dong Loc, 2019 Effects of Corporate Disclosure and Transparency on Firm Performance of Companies Listed in the Vietnamese Stock Market Journal of Trade Science, 132: 30-40 CHAPTER 1: INTRODUCTION 1.1 REASON FOR CHOOSING THE TOPIC Asymmetric information on the stock exchange market of listed companies leads to two common consequences: adverse choices and moral hazard; distorting the economic entities’ decision in the market may cause collapses on stock exchange market For investing capital in listed companies on the stock exchange market, transparency of information for investors has become more critical and decisive The index of information transparency and disclosure of listed companies is a measure of the trustworthiness of listed companies, which reduces information asymmetry between investors and listed companies The studying on effects of information transparency and disclosure on cost of capital, profit, and firm value of listed companies on Vietnam’s Stock Exchange market (VSEM) is a new topic in Vietnam Information transparency and disclosure of listed companies are an important criterion to help investors assess risk levels to make appropriate investment decisions Karim et al., (2006) supposed that the higher of disclosure was, the less the asymmetric information between investors and listed companies was So far, several studies have developed disclosure indecies based on the corporate governance score (CGS); and which identified some factors that affected on disclosure level of listed companies on VSEM (Ngo Thu Giang and Dang Anh Tuan, 2013; Pham Ngoc Toan and Hoang Thi Thu Hoai, 2015) The dissertation has built an index of information transparency and disclosure based on the criteria set of Standard and Poors (S&P), legal regulations promulgated in Vietnam (Circular 155/2015TT BTC) According to asymmetric information theory and empirical evidences, the higher disclosure level is, the less information asymmetry between investors and company is, the disclosure reduces the risks of investors The studies of Iatridis (2008), Ehsan and Darabi (2015) showed that the level of disclosure was negatively correlated with the cost of equity of the listed firms According to agency theory, when the situation of information asymmetry is reduced, the agency costs would be decreased The higher information transparency and disclosure level is, the higher the business efficiency of the listed companies is Patel and Dallas (2004), Bushman and Smith (2003), Stiglbauer (2010) found a positive correlation between transparency and disclosure degree and firm performance of listed firms Up to now, there is not any research on the impact of information transparency and disclosure level on the cost of equity and firm performance of the listed companies according to transparency and disclosure index based on S&P items on VSEM For the needs to assess the influences of information transparency and disclosure of the listed companies on VSEM, the dissertation has conducted the research on "Information transparency and disclosure of the listed companies on Vietnam Stock Exchange market" 1.2 RESEARCH OBJECTIVES 1.2.1 General Objectives The general objectives of the dissertation are to identify the factors affecting information transparency and disclosure of listed companies, to analyze the effects of information transparency and disclosure on the cost of equity and performance of the listed companies on Vietnam’s Stock Exchange market 1.2.2 Specific objectives For achieving the general objectives, the specific objectives of the dissertation includes: (i) Develop a set of information transparency and disclosure criteria to evaluate the listed companies on VSEM; (ii) Identify factors affecting information transparency and disclosure of the listed companies on VSEM; (iii) Analyze the impact of information transparency and disclosure on the cost of equity of the listed companies on VSEM; (iv) Analyze the effects of information transparency and disclosure on the firm performance of the listed companies on VSEM 1.3 SCOPE OF THE RESEARCH 1.3.1 Research contents (i) Based on the theories and empirical evidences, the dissertation establishs a model to identify the factors affecting information transparency and disclosure of listed firms, and the effect of information transparency and disclosure on the cost of equity and performance of the listed firms on VSEM (ii) The dissertation features information of the listed firms on VSEM (iii) The dissertation analyzes the factors affecting information transparency and disclosure of listed firms, and the effect of information transparency and disclosure on the cost of equity and performance of the listed firms 1.3.2 Research objects The objects of the dissertation are the factors affecting on information transparency and disclosure, and the effect of information transparency and disclosure on cost of equity and performance of the listed companies on VSEM 1.3.3 The scope of space and time The dissertation studies the issues related to joint stock companies listed on Vietnam Stock Exchange Market, including Ho Chi Minh Stock Exchange (HOSE) and Hanoi Stock Exchange (HSE) Data has been used in the dissertation colleted in website of State Securities Committee from year 2014 to year 2016 CHAPTER 2: THEORETICAL AND LITERATURE REVIEW 2.1 SOME CONCEPTS USED IN DISSERTATION 2.1.1 Disclosure In the stock exchange market, disclosures are the acts of transfering information to groups of all participants on the stock exchange market; information disclosure can be carried out in many forms: reports, printed newspapers, video news, newsletters, magazines, websites, etc The listed companies notify the public with the information related to their companies, market situation, and operations of the companies 2.1.2 Information transparency and disclosure Information disclosure of the listed companies must ensure the important characteristics: regular and duly, fullfill, reliable, accurate, easy to understand, relevant, detailed, and verified Information transparency and disclosure are always go together, ensuring integrity, completeness, clarity, honesty and timeliness Therefore, the measurement of information disclosure of the listed companies on the stock exchange market must include information transparency and disclosure of the listed companies for protecting investors against the information asymmetry situation on the stock exchange market 2.1.3 Cost of equity (CE) The cost of equity is the required profit of shareholders when they invest capital in a company's stock, and it is tied to the risk of the listed companies’ stock The cost of equity is determined by the capital asset pricing method (CAPM), used to measure the impact of information transparency and disclosure on the cost of equity in this dissertation Several studies showed that the capital asset pricing model (CAPM) was considered to be the most suitable in determining the cost of equity associated with stock risk implemented information disclosure on the stock market (Graham and Harvey, 2002) The cost of equity of the company i (Rei) is calculated as follows: Rei = Rf + βi (Rm - Rf) In which: * Rf: risk-free rate * βi: market risk of stock i * Rm: market rate of return 2.1.4 Firm performance The performance of the listed companies is measured by the return on assets ratio (ROA) and return on equity ratio (ROE), which are commonly used to determine the firm performance in investments * Return on equity ratio The return on equity ratio (ROE) is used to determine the efficiency of using the equity of a listed company, calculated by the following formula: ROE ratio = Net profit / Equity * Return on assets ratio The return on assets ratio (ROA) is used to determine the profitability of a listed company’s assets, calculated by the following formula: ROA ratio = Net profit / Total assets 2.2 THEORETICAL REVIEW 2.2.1 Asymmetric information theory The theory of asymmetric information (Akerlof, 1970) explains the situation of asymmetric information in transactions when one party has more or more fully information, participating in a transaction, and the other party has little information At that time, the price of products is not the equilibrium price of the market, and it may be too low or too high Information asymmetry on the stock exchange market is a phenomenon that information is not provided fully and duly, and is not easily accessible when a party participating in a transaction has more information and got earlier than the other party When information asymmetry frequently happens on the stock exchange market, shareholders will be put at a adverse selection in trading The asymmetric information theory is used to explain the influence of corporate governance on the level of information transparency and disclosure of listed companies; and used to explain the effect of information transparency and disclosure on cost of equity and firm performance of listed companies in the following hypotheses 2.2.2 Signal theory Signal theory was developed by Spence (1973) from the theoryof information asymmetric of Akerlof (1970), and used by Ross (1977) to explain the publication of information in the listed firms’ report Information disclosure is one of the means of signalling A listed company publishes more information to signal to shareholders that it is better managed than other listed companies in the market Signalling theory is used to explain the impact of information transparency and disclosure on cost of equity and firm performance of the listed companies in the following hypotheses 2.2.3 Agency theory The agency theory was firstly developed by Ross (1973) Jensen and Meckling (1976) gave one of the first studies of agency theory related to management behavior, agency cost and ownership structure Agency theory studies the relationship between the principal and the agent; the agent represents the principal to manage the company and perform its works Agency theory is used to explain the influence of the factors such as Chairman of the Administration Board cum Director General, Board size, independent members of the Administration Board, ownership structure, firm size, leverage, profitability, auditing to the level of information transparency and disclosure in the following hypotheses 2.2.4 Stewardship theory The stewardship theory (Donaldson and Davis, 1991) showes a strong relationship between managers and the success of the company, and supposes that the interests of shareholders will be maximized if the Chairman of Administration Board concurrently holds the position of Chief Executive Officer This theory explains that the concurrent assumption helps to increase disclosure supervision and reduce operating errors 2.2.5 Transaction cost theory The transaction cost theory (Williamson, 1979) considers transaction cost to be a focus of economic researchs The theory of transaction cost explains that most things can be rationalized by paying an appropriately specified transaction cost as well as considering the effective processing of information when trading is an important concept 2.2.6 The relation among disclosure, cost of equity, and firm performance The propositions of agency theory provide a fundamental argument about the relations between the owner and agent, as well as disclosure and cost of equity, firm performance Proposition (1) concludes that the disclosure of listed firm from the agent aims at informing the owner that their activities are mainly for the benefit of shareholders Proposition (2) indicates that when the information is publicly disclosed and transparent, the disclosure belongs to the company's financial disclosure is 37.5 scores; the disclosure on the ownership structure and investor's rights is lower than its required 5.9 scores; similarly, information about the structure of Administration Board and operational activities are lower than its required 12 scores The analysis results show that listed companies have low to moderate levels of information disclosure in all categories Table 4.4 : The index of information transparency and disclosure of the listed companies in VSEM Content Ownership structure and investor rights Financial transparency and disclosure Board and management structure and process Total score Min Max Ave Mode STD 5.1 17.3 12.5 12.2 1.6 11.2 40.8 31.5 31.6 4.1 7.1 26.5 18.6 18.4 2.7 36.7 79.6 62.5 63.3 5.8 Source: The analysis results using data source by author 4.2 OVERALL INFORMATION OF THE LISTED COMPANIES IN THE DISSERTATION * Research samples There are 505 listed companies in HOSE and HNX surveyed in the dissertation Companies lacking extreme information and data, and the ones listed less than five years are eliminated to ensure that the selected listed companies have a similarity in listing time and governance characteristics 484 listed companies have enough data in three consecutive years from year 2014 to year 2016 be selected There are 1452 observations selected in VSEM to ensure the analysis scale of the dissertation The results are presented in Table 4.6 21 Table 4.6: The number of listed companies of survey in the dissertation Code 01 02 03 04 05 06 07 08 09 10 Sector HNX HOSE Financials 23 17 Consumer Staples 20 31 Real Estate 32 Industrials 99 76 Materials 22 45 Consumer Discretionary 28 30 Ultilities 18 Energy Health Care 8 Information Technology Total 213 (%) 8,26 10,54 8,06 36,17 13,84 11,98 3,72 2,27 3,31 1,85 271 Source: The analysis results using data source by author * Characteristics of governance and finance corporate Analysis of financial characteristics of the listed companies in Table 4.8 shows that the firm size and leverage were less volatile during that period However, the company's cost of equity increased after three years: from 7.7% in year 2014 to 10.7% in year 2016 Changing the cost of capital also has a significant affected on company profits The return on equity ratio decreased from 9.2% in year 2014 to 8.3% in year 2016; similarly, the return on assets ratio decreased from 5.2% in year 2014 to 4.9% in year 2016 22 Table 4.8: Summary characteristics of the listed companies in years Variables Listing year TDI Firm’s size Leverage (time) Cost of equity (time) ROA (time) ROE (time) TOBIN_Q (time) MBR (time) Year 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Min 43,9 36,7 42,9 23,330 23,282 23,287 0,015 0,007 0,001 0,000 0,054 0,000 -0,365 -1,587 -0,418 -3,927 -2,401 -1,875 0,297 0,235 0,195 0,254 0,154 0,098 Max Ave 14 15 16 73,5 78,6 79,6 34,125 34,377 34,545 0,967 0,971 0,967 0,100 0,069 0,327 0,386 0,784 0,374 0,559 0,982 0,491 6,774 27,633 17,687 14,454 57,846 26,709 5,3a 6,3b 7,3c 61,4a 62,9b 63,3b 27,289 27,395 27,472 0,498 0,498 0,487 0,077b 0,062a 0,107c 0,052 0,054 0,049 0,092 0,098 0,083 1,065 1,098 1,126 1,140 1,178 1,185 Source: The analysis results using data source by author 23 STD 2,4 2,4 2,4 5,6 5,7 5,9 1,693 1,712 1,727 0,232 0,231 0,242 0,008 0,002 0,058 0,071 0,109 0,075 0,239 0,194 0,196 0,495 1,294 0,949 1,036 2,690 1,487 4.3 FACTORS AFFECTING ON THE LEVEL OF INFORMATION TRANSPARENCY AND DISCLOSURE OF LISTED COMPANY Measuring the effects of administrative and financial factors on the level of information transparency and disclosure of listed companies on VSEM, the dissertation uses some estimation methods such as REM, FEM and instrumental variables (2SLS and GMM) Estimated results from the models are presented in detail in Table 4.17 The variables: Board of Directors, Foreign ownership, Management ownership, leverage, listing place, TDI in the past are used as instrumental variables for firm size variables based on pair correlation coefficients in Table 4.16 The results of the 2SLS and GMM estimation methods from the "model 4" are consistent with the test results The results of the 2SLS and GMM estimation models show that the level of information transparency and disclosure is influenced by factors such as TDI in the past, numbers of independent members of Administration Board, corporation size, ROA, firm value, and have the same direction with the estimated results at the basic estimation model (REM model) The dissertation concludes: (i) the number of independent members of Administration Board is positively correlated with the level of information transparency and disclosure; increasing numbers of independent members of Administration Board will reduce information asymmetry between managers and shareholders; (ii) firm size is positively correlated with the information transparency and disclosure of listed companies; (iii) firm performance measured by the ROA ratio has a positive effect on information transparency and disclosure The companies 24 having high profit margins will disclose more information, and their agents will use this for better contracting; (iv) firm value measured by TobinQ is positively correlated with the level of information transparency and disclosure of listed companies; (v) the degree of information transparency and disclosure in the previous period is positively correlated with the disclosure in the current Table 4.17: Factors affecting on the level of information transparency and disclosure of listed companies Variables constant REM FEM 2SLS GMM *** *** 20,31 25,35 14,01 15,38*** (7,49) (1,06) (3,35) (3,77) TDI t-1 0,548*** -0,337*** 0,586*** 0,602*** (20,13) (-7,57) (18,39) (19,44) Board’s size 0,125 0,116 0,0599 0,0441 (1,20) (0,67) (0,64) (0,47) *** Duality of the -0,499 -2,149 -0,417 -0,489 Chairman (-1,43) (-2,69) (-1,23) (-1,45) Independent 0,358** -0,0992 0,287* 0,365** members (2,43) (-0,26) (1,77) (2,28) *** ** *** Firm’s size 0,268 2,147 0,426 0,344** (2,78) (2,44) (2,48) (2,06) ROA 6,686*** 0,603 6,599*** 6,752*** (4,06) (0,27) (3,93) (4,16) * TOBIN_Q 0,140 -0,358 0,138 0,135* (1,00) (-0,88) (1,78) (1,79) Observations 968 968 968 968 R (%) 71,07 1,7 42,27 42,42 Wald/ F test 564,8*** 9,6*** 548,5*** 599,2*** Hausman(FE/RE) 669,6*** Wu-Hausman 1,85 ns 0,95 ns Sagan/ Hansen’s J 7,54 * 7,54 * 25 Source: The analysis results using data source by author Note: * Significant at the 10% level, ** significant at the 5% level, *** significant at the 1% level The analysis results use Hausman test to select model REM/FEM; Sagan, Hansen’s J test to identify instrumental variables in GMM; Wu-Hausman test to identify endogeneity variables; the number in parentheses presents for t and z-value in the model 4.4 EFFECT OF INFORMATION TRANSPARENCY AND DISCLOSURE ON THE COST OF EQUITY OF LISTED COMPANY The results of the 2SLS and IV-2SLS regression models indicate that the cost of equity of listed companies is influenced by factors such as the degree of information transparency and disclosure, firm size, leverage and are proportional to the estimated results in the basic estimation model (FEM) The firm size is positively correlated with the cost of equity; the degree of information transparency and disclosure, and the leverage are negatively correlated with the cost of equity of the listed companies The dissertation concludes that the level of information transparency and disclosure is negatively correlated with the cost of equity of the listed companies The dissertation results are consistent with the theory of information disclosure and cost of equity (Botosan, 1997; Cheney, 2013) The results are also consistent with previous studies of many authors: Botosan and Plumlee (2002); Chen et al., (2004); Francis et al., (2007); Guest (2009); Lopes and Alencar (2010); Apergis et al., (2011); Yang and Li (2013); Khlif et al., (2015); Nguyen Viet Dung and Nguyen Thi Thu Huyen (2016); Beigi et al., (2016); Dung and Lan, (2017); Girao and Paulo (2018); He et al., (2019) 26 The dissertation also finds a negative correlation between leverage and the cost of equity of listed companies, being consistent with the conclusions of Khlif et al., (2015); and a positive correlation between the firm size and the cost of equity of the listed companies, being consistent with the results of Nguyen Viet Dung and Nguyen Thi Thu Huyen (2016); Beigi et al., (2016); Dung and Lan (2017); Aubert et al., (2017) Table 4.19: Effect of information transparency and disclosure on cost of equity of listed companies Variables constant REM FEM 2SLS IV-2SLS *** *** -0,0603 -0,788 0,0146 0,0146 (-3,30) (-5,30) (0,35) (0,35) TDI 0,00008 0,00049 -0,00194** -0,00194** (0,46) (1,42) (-1,98) (-1,98) Firm’s size 0,00520*** 0,0312*** 0,00720*** 0,00720*** (7,80) (5,63) (5,62) (5,62) Leverage -0,00926** -0,0320* -0,0163*** -0,0163*** (-1,98) (-1,77) (-2,74) (-2,74) Ma_owner -0,00004 -0,000001 -0,00002 -0,00002 (-0,67) (-0,01) (-0,39) (-0,39) Observations 1452 1452 1452 1452 Wald/ F test 73,84 9,5 49,93*** 12,44*** R2 (%) 3,47 3,79 -3,56 R2 (%) uncentered 80,92 Hausman (FEM//REM) 27,54*** Wu-Hausman 5,27** 2,89* *** Sagan/ Hansen’s J 19,3 19,31*** Source: The analysis results using data source by author Note: * Significant at the 10% level, ** significant at the 5% level, *** significant at the 1% level The analysis results use Hausman test to select model REM/FEM; Sagan, Hansen’s J test to identify instrumental variables in GMM; Wu-Hausman test to identify endogeneity variables; the number in parentheses presents for t and z-value in the model 27 4.5 EFFECT OF INFORMATION TRANSPARENCY AND DISCLOSURE ON THE PERFORMANCE OF LISTED COMPANY 4.5.1 Effect of the information transparency and disclosure on ROE ratio of the listed company The analysis results demonstrate that endogenous variables appear in the FEM regression model, the study uses 2SLS and GMM regression models with three instrumental variables to overcome endogenous status The results of Wu-Hausman and Sagan tests show that no endogenous variables found in the 2SLS regression model, and Wu-Hausman and Hansen'J tests indicate that no endogenous variables found in the GMM regression model The study uses 2SLS regression results to explain the effect of information transparency and disclosure on ROE ratio Transparency and disclosure index, management ownership, and foreign ownership are positively correlated with the ROE at 1% significance level Firm leverage is negatively correlated with the ROE ratio (Table 4.21) The dissertation concludes that information transparency and disclosure are positively correlated with firm performance measured by the ratio of return on equity of listed companies The dissertation result is consistent with the agency theory and empirical studies on information disclosure of listed companies by Francis et al., (2008), Adiloglu and Vuran (2012), Rashid et al., (2015), Gonzalez et al., (2019) 4.5.2 Effect of the information transparency and disclosure on ROA ratio of the listed company The analysis results indicate that endogenous variables are found in the FEM regression model; the dissertation uses 2SLS and GMM regression models with instrumental variables to overcome the endogenous status 28 that appears in the regression model The Wu-Hausman and Sagan test results of the 2SLS regression model show no endogenous variables found, which is similar to the Wu-Hausman and Hansen'J tests of the GMM regression model The regression results of the GMM model are used to explain the effect of information transparency and disclosure on ROA ratio (Table 4.22) The degree of information transparency and disclosure is positively correlated with the ROA ratio at the 1% significance level Similarly, the percentage of management ownership and the listing place are positively correlated with the ROA ratio Firm leverage is negatively correlated with the ROA ratio The dissertation concludes that the level of information transparency and disclosure is positively correlated with the ratio of return on assets of listed companies A listed company with a good level of information transparency and disclosure will increase the firm performance of the company (ROA) The dissertation results are consistent with the previous research results of the authors Adiloglu and Vuran (2012), Liu et al., (2014), Rashid et al., (2015), Gonzalez et al., (2019) In brief Information transparency and disclosure of listed companies on Vietnam stock exchange market are influenced by the management and financial factors, i.e., the number of independent members of Administration Board, firm size, ROA ratio, firm value Besides, it is influenced by the degree of disclosure in the previous period Transparency and disclosure of listed companies are positively correlated with ROA and ROE ratio and negatively correlated with the company's cost of equity 29 Table 4.21: Effect of information transparency and disclosure to ROE of listed companies Variables constant TDI Board’s size Duality Ma_owner Fo_owner Leverage Audit Listing place Observations R2 (%) F/Wald test REM -0,0392 (-0,57) 0,00238** (2,29) 0,00154 (0,37) -0,0252* (-1,82) 0,00079** (2,36) 0,00095** (2,03) -0,116*** (-4,26) 0,00198 (0,13) 0,0229* (1,65) FEM GMM 0,432 -0,149 -0,1671* (3,73) (-1,55) (-1,75) *** -0,00076 0,00410 0,0043*** (-0,48) (2,70) (2,84) 0,00489 -0,00075 -0,0021 (0,74) (-0,19) (-0,54) *** -0,0742 -0,0270 -0,0104 (-2,84) (-1,51) (-0,66) 0,00072 0,00074*** 0,0006** (0,97) (3,00) (2,55) * *** -0,00205 0,00132 0,0014*** (-1,94) (2,96) (3,15) *** *** -0,574 -0,0906 -0,0500* (-7,00) (-2,66) (-1,82) -0,0330 0,00660 0,0018 (-0,76) (0,51) (0,14) 0,0152 0,0160 (1,22) (1,29) 1452 1,54 48,38*** Hausman (FEM//REM) Sagan/ Hansen's J Wu-Hausman IV-2SLS *** 1452 5,85 8,52*** 968 5,9 7,51*** 968 5,37 58,7*** 4,14 ns 0,66 ns 4,14 ns 0,66 ns 55,61*** Source: The analysis results using data source by author Note: * Significant at the 10% level, ** significant at the 5% level, *** significant at the 1% level The analysis results use Hausman test to select model REM/FEM; Sagan, Hansen’s J test to identify instrumental variables in GMM; Wu-Hausman test to identify endogeneity variables; the number in parentheses presents for t and z-value in the model 30 Table 4.22: Effect of information transparency and disclosure to ROA of listed companies Variables constant TDI Board’s size Duality Ma_owner Leverage Audit Listing place Category REM -0,0409 (-1,37) 0,00159*** (3,92) 0,00221 (1,34) -0,00921 (-1,64) 0,000141 (1,02) -0,111*** (-9,70) 0,000276 (0,04) 0,0124** (2,07) 0,0307*** (2,88) Observations R (%) F/ Wald test FEM 2SLS (2) GMM (2) 0,0846** -0,130*** -0,130*** (2,07) (-2,62) (-2,73) *** 0,000363 0,00295 0,00305*** (0,65) (3,73) (4,11) 0,00307 0,00206 0,00102 (1,32) (1,05) (0,55) * -0,0164 -0,00722 -0,00455 (-1,78) (-0,86) (-0,63) 0,000009 0,00018 0,00018 (0,03) (1,46) (1,58) *** *** -0,136 -0,108 -0,105*** (-4,73) (-8,79) (-8,80) -0,00842 0,00158 0,00173 (-0,55) (0,19) (0,24) 0,0088* 0,0078 (1,68) (1,52) *** - 0,0334 0,0307*** (3,50) (3,36) 1452 2,3 141,2*** 1452 2,9 4,86*** 968 12,6 194,2*** 968 12,5 190,3*** 3,32 ns 0,20 ns 3,32 ns 1,02 ns 21,2*** Hausman (FEM//REM) Sagan/ Hansen’J Wu-Hausman Source: The analysis results using data source by author Note: * Significant at the 10% level, ** significant at the 5% level, *** significant at the 1% level The analysis results use Hausman test to select model REM/FEM; Sagan, Hansen’s J test to identify instrumental variables in GMM; Wu-Hausman test to identify endogeneity variables; the number in parentheses presents for t and z-value in the model 31 CHAPTER 5: CONCLUSION AND RECOMMENDATION 5.1 CONCLUSION * Developing an index of information transparency and disclosure for measuring the transparency and disclosure of listed companies on Vietnam Stock Exchange Market The dissertation has developed an index of information transparency and disclosure to measure the degree of information transparency and disclosure of listed companies The set of TDI of the dissertation is the application of transparency and disclosure criteria based on the S&P standards to Vietnam Stock Exchange market in the integration flow into the world financial market, which is combined with the compliance with disclosure according to Vietnamese law (Circular no 155/2015/TTBTC) and the voluntary disclosure of listed companies The transparency and disclosure index of listed companies are applied to measure and reflected the real situation of disclosure on Vietnam Stock Exchange market * Determining the factors affecting information transparency and disclosure of listed companies on Vietnam Stock Exchange market The dissertation applies 2SLS and GMM methods to analyze and conclude that number of independent members of Board, firm size, return on assets ratio, and firm value are proportional to the level of information transparency and disclosure of listed companies The level of information transparency and disclosure in the past is proportional to the level of information transparency and disclosure in the current The listed companies with big firm size, high profit margins, and 32 having many independent members in Board will provide more information transparency and disclosure * Effect of information transparency and disclosure on the cost of equity of listed companies The dissertation uses moment estimation method to analyze and conclude that increasing information transparency and disclosure reduces the cost of equity of listed companies Reducing the cost of equity is a big motivation for listed companies to improve the level of information transparency and disclosure itself and on Vietnam Stock Exchange market Besides, the cost of equity is positively correlated with firm size and negatively correlated with leverage of listed companies * Effect of information transparency and disclosure on the firm performance of listed companies Using the estimating method of 2SLS and GMM, the dissertation concludes that the degree of information transparency and disclosure is positively correlated with the ratio of return on equity and the ratio of return on assets of listed companies Ownership structure has a positive effect on a firm performance (ROA and ROE ratio) The greater the foreign and management ownerships are, the greater the company's performance measured by ROA and ROE is Listing place at prestigious stock exchanges has a positive effect on the firm performance of listed companies; however, leverage is inversely proportional to the performance 5.2 RECOMMENDATION 5.2.1 Governing authorities: State Securities Commission 33 From the results, the dissertation recommends the management agencies of listed companies (Stock Exchange, State Securities Commission) to use this set of information transparency and disclosure indecies as a scientific evidence for building a set of criteria to assess the transparency and disclosure of the listed companies on Vietnam Stock Exchange market Moreover, it is suggested to use transparency and disclosure indecies as disclosure signal to strengthen the monitoring of listed companies in compliance with information transparency and disclosure The model of the effect of information transparency and disclosure on cost of equity and firm performance of listed companies of the dissertation is a scientific evidence that should be used to recommend listed companies to improve transparency and disclosure on Vietnam Stock Exchange market The State Securities Commission needs to increase the level of penalties for non-transparent listed companies on the stock market in order to force them to comply with the legal decisions on information transparency and diclosure on Vietnam Stock Exchange market 5.2.2 Listed companies on Vietnam Stock Exchange market The companies listed on the VSEM must be responsible for disclosure and information transparency with their shareholders, investors to reduce the information asymmetric situations The listed companies must develop an internal policy of disclosure, improve the quality and content of information disclosed, and build a mechanism for determining personal responsibility in disclosure Listed companies should constitute a professional disclosure department The contents of information disclosure should be clear, easy to understand, and focus on arising issues It is recommended to encourage the 34 listed companies to implement transparency and disclosure according to advanced standards as "TDS", to improve the quality of financial statements and annual reports, thereby that brings more benefits to the company such as reducing the cost of equity and improving firm performance 35 ... transparency and disclosure of the listed companies on VSEM, the dissertation has conducted the research on "Information transparency and disclosure of the listed companies on Vietnam Stock Exchange market" ... objects of the dissertation are the factors affecting on information transparency and disclosure, and the effect of information transparency and disclosure on cost of equity and performance of the listed. .. honesty and timeliness Therefore, the measurement of information disclosure of the listed companies on the stock exchange market must include information transparency and disclosure of the listed