The role of women in corporate financial performance in Vietnam

Abstract

The main objective of this thesis is to find the role of women on board committees as the percentage of women, and the women as Chairman on corporate financial performance. The thesis employs annual panel data of 100 listed companies on HOSE during the period from 2008 to 2012 in case of nine industrial sectors including Agriculture, forest, fishing; Mining and quarrying; Manufacturing; Electricity, gas, stream and air conditioning supply; Construction; Wholesaler and retail trade; repair of motor vehicles and motorcycles; Transportation and storage; Information and communication; Real estate activities.Dependent variable (corporate financial performance) of this thesis is ROA, ROE, and Tobin’s Q. Using the RE method, there are various results indicating the relationship between variables in the model including positively correlated, negatively correlated, non-linearly correlated, and no correlation at all. In particular, this study finds that the percentage of women on board committees (PWOMEN) and women as the Chairman (WCHAIRMAN) contribute positive to corporate financial performance (ROA, ROE, and TobinQ) (Carter et al., 2003; Adams and Ferreira, 2004; Lang and Stulz, 1993; Campbell and Minguez-Vera, 2008). The solid evidence that greater women’s representation in corporate leadership correlates directly with improved business performance, companies with the most women on their boards committees significantly and consistently outperform (Smith et al., 2006; Dezsö and Ross, 2012). In addition, by using MMR approach, the empirical results also present the factors (education background, year of experience management, and industrial sectors) of the percentage of women on board committees affect corporate financial performance (Lerner, 1997; Box et al., 1995; Hisrich et al., 1997). Firstly, the education background and year of experience management of women on boards are the positive relationship with ROA, ROE, and TobinQ. This means that women have higher degree education and the large number of year of experience influences improve corporate financial performance (Siong-Choy, 2007). The last and the secondly, the environmental factors are differentially in every industrial sectors (Lerner, 1997). Moreover, SECTOR1, SECTOR3, SECTOR7, and SECTOR8 were associated with higher or positive financial performance, but SECTOR2, SECTOR6 the association was negative. In conversely, SECTOR4 and SECTOR5 are not significant.