Information asymmetry and firm value: is Vietnam different?

Abstract

Using firm-level data from 250 non-financial companies with 2,500 firm-year observations collecting from two stock exchange markets in Vietnam covering a 10-year period from 2008 to 2017, this paper examines the relationship between information asymmetry and firm value in Vietnamese firms. The findings reveal that fundamentally, information asymmetry in Vietnamese firms has a negative impact on firm value. Although this conclusion is consistent with that in the literature underlying by pecking order and agency cost theories, the value of information asymmetry related variables is higher than that in similar studies conducted in other developed countries. The results also find that the financial leverage in Vietnamese firms is higher than in other developed countries but can only play a limited role in mitigating the negative impact of information asymmetry on firm value. All in all, the findings relating to all variables used in the study highlight that Vietnam is a typical emerging country because there is a precise distance from other developed countries.