Degree Name

Doctor of Philosophy


School of Accounting, Economics, and Finance


This thesis comprises three interconnected research projects on corporate governance, the risk of involuntary delisting, and earnings management, using evidence from Vietnamese listed firms. Although prior research has documented the effects of corporate governance on these business outcomes, further research focussed on business and markets in Vietnam is particularly interesting. Vietnam has a unique institutional setting, characterised by weak law enforcement, inadequate protection of minority shareholders, high ownership concentration and government intervention, and the increasing importance of foreign investors.

The first essay examines the scandal involving the most high-profile Vietnamese listed company that faced the threat of bankruptcy due largely to ethical and governance breakdowns. Because Vien Dong Pharmaceutical Joint Stock Company (DVD) was a fast-growing and successful business, its collapse shook public confidence. The sudden failure of DVD in 2011 has raised questions about the ethics of its senior management team and particularly the effectiveness of its internal and external corporate governance schemes. An analysis of qualitative and quantitative data from various sources suggests that DVD’s failure was brought or exacerbated by dishonest and self-interested managerial activities involving accounting and stock price manipulation, and a series of violations of existing laws and regulations. This study is the first to scrutinise the DVD scandal in terms of its ethical practices and corporate governance weaknesses, the objective being to assist regulators and other stakeholders who can learn from its bankruptcy. This case study suggests that corporate governance and ethical failure contributed to severe strategic errors, with catastrophic consequences for the company. Its findings indicate that weak or questionable corporate governance and ethical practices should be a signal to all potential investors and to corporate regulators. The DVD scandal was the equivalent in Vietnam of the US Enron. The results of this study support the literature in suggesting that promoting an ethical corporate culture and good corporate governance practices, while not always able to prevent companies from collapsing, are needed to bring into line the competing interests of related parties, leading potentially to both better corporate financial performance and lower levels of inherent business risk. Building on the findings from the first essay, the second essay empirically examines the effect of corporate governance on the risk of involuntary delisting using hand-collected data of 815 Vietnamese non-financial firms from 2008 to 2019. Firms with a more negative or undesirable corporate governance metric emerge as being significantly associated with the risk of involuntary delisting. That relationship is more pronounced in non-state-owned enterprises, firms with high foreign ownership, low concentration of ownership, and high growth firms. Tests of out-of-sample forecasting accuracy indicate that including corporate governance measures enhances the discriminatory power of the delisting prediction model. Results are robust to the use of distance to default and credit default swap spread as alternative outcomes of poor performance. Furthermore, the results are verified using instrumental variable and propensity score matching methods to address potential reverse causality and sample selection bias.

This thesis is unavailable until Thursday, January 20, 2022



Unless otherwise indicated, the views expressed in this thesis are those of the author and do not necessarily represent the views of the University of Wollongong.