Corporate governance and earnings management: Evidence from Vietnamese listed firms

Quynh Nguyen, Maria H. Kim, Searat Ali

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Using the hand-collected data of 800 Vietnamese non-financial firms from 2008 to 2018, this study constructs a comprehensive corporate governance index in alignment with the corporate governance code of best practices in Vietnam. We provide strong evidence that corporate governance quality restrains earnings management, measured by both the absolute and signed discretionary accruals and the real earnings management. In particular, the negative association between corporate governance quality and earnings management is more profound in private firms (non-SOEs), firms with high foreign ownership and low concentrated ownership, and high growth firms compared to their peers. The observed results are robust to alternative measures of discretionary accruals, total accruals andreal earnings management. Furthermore, the results are corroborated using instrumental variables, firm fixed effects and propensity score matching methods to address potential reverse causality and sample selection bias.

Original languageEnglish
Pages (from-to)775-801
Number of pages27
JournalInternational Review of Economics and Finance
Issue numberPart A
Early online date27 Jul 2023
Publication statusE-pub ahead of print - 27 Jul 2023


  • Accrual-based earnings management
  • Corporate governance
  • Discretionary accruals
  • Emerging markets
  • Ownership structure
  • Real earnings management
  • Vietnam


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