Toan Luu Duc Huynh, Hiep N. Luu, Chao Liang and Francesco Pastore
Loan Quynh Thi Nguyen, Duong Thuy Le, Hiep Ngoc Luu, Anh Huu Nguyen and Thinh Gia Hoang
The purpose of this paper is to explore the role of external audit quality in reducing firm misreporting practices.
Abstract
Purpose
The purpose of this paper is to explore the role of external audit quality in reducing firm misreporting practices.
Design/methodology/approach
Data are gathered from a number of sources including the Osiris database and firms’ annual reports to construct a comprehensive data set containing financial and non-financial information of over 3,100 publicly listed firms in China during the period 2009–2017. A number of rigorous empirical specifications are utilized with the use of probit, logit and conditional logit regressions, as well as panel pooled OLS and fixed-effect estimators. The IV-2SLS, 2-step system GMM and difference-in-differences techniques are also employed to deal with the potential endogeneity bias to ensure the robustness of the empirical results.
Findings
The empirical results reveal that larger firms and firms having more tangible assets and greater retained earnings are more likely to employ a better-quality external auditor. Subsequently, higher audit quality leads to a deterioration in corporate misreporting. However, these results are not homogenous across firms. While we document similar findings in the case of non-state-owned firms, state-owned enterprises (SOEs) appear to have less tendency to hire a higher-quality auditor, and higher-quality auditors in turn do not play a significant role in reducing misreporting practices in SOEs.
Originality/value
This paper contributes to a better understanding of the mechanism to mitigate corporate misreporting practices. It is one of the few to empirically investigate auditor selections and the association between external audit quality and corporate misreporting practices in China.
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Hiep Ngoc Luu, Ngoc Minh Nguyen, Hai Hong Ho and Dao Ngoc Tien
The purpose of this paper is to empirically investigate the impact of infrastructure on economic development in developing economies.
Abstract
Purpose
The purpose of this paper is to empirically investigate the impact of infrastructure on economic development in developing economies.
Design/methodology/approach
A panel data analysis approach is utilised to evaluate the influence of various types of infrastructure on economic development in Vietnam over the period 2003–2013. Specifically, this study uses spatial night-light data taken from NASA’s satellite as an alternative proxy for economic development.
Findings
The analyses indicate that infrastructure enhancement consistently exerts a positive effect on the economy. Upon further investigations of the channels through which infrastructure could affect economic development, the empirical results reveal, in addition, that the developmental impact of infrastructure tends to be stronger if more rigorous government supervision and oversight of the construction and delivery of infrastructure projects are in place to ensure the efficiency and effectiveness of the private sector’s investment in infrastructure facilities. Finally, the interaction of infrastructure with human capital appears to exert an especially important influence upon economic development.
Originality/value
This study contributes to the debate over whether infrastructure has a real developmental effect in developing countries. Some important policy implications are then drawn from the empirical analysis. As a result, this paper will be of value to other researchers, economists, business leaders and policy-makers attempting to understand the economic benefit of infrastructure development.
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Hieu Thanh Nguyen, Thinh Gia Hoang and Hiep Luu
This study aims to examine corporate social responsibility (CSR) with the opportunity- and innovation-based view of multinational subsidiaries (MNSs) in Vietnam. While CSR has…
Abstract
Purpose
This study aims to examine corporate social responsibility (CSR) with the opportunity- and innovation-based view of multinational subsidiaries (MNSs) in Vietnam. While CSR has traditionally been investigated in the developed market, this paper demonstrates how MNSs can take advantage of their CSR practises and create business opportunities and innovation activities for themselves and local society in Vietnam.
Design/methodology/approach
This is an exploratory qualitative research-based on four MNSs that have practised CSR in Vietnam. Data were collected from 18 individual interviews with managers and business leaders in four case firms.
Findings
This study finds that CSR activities in the studied firms potentially drive new business opportunities and innovation in the form of product, process, idea and management practises. In addition, both opportunities and innovation also benefit MNSs and the local community in Vietnam.
Research limitations/implications
The paper makes clear that CSR literature varies depending on the different countries or areas where the studies take place and these studies tend to focus on a specific area that was appropriate within a particular socio-economic and political context. Given that the business context in Vietnam is characterised by opportunities and incentives for innovation from the socio-economic of the context of a South East Asian developing market, the research provides an important first step in the integration and consolidation of CSR practises, opportunities and innovation. In light of the findings presented above, the study provides an important contribution to the CSR literature, particularly the CSR practises of multinational corporations (MNCs) in developing countries.
Practical implications
The study suggests that CSR practitioners in Asian emerging countries should ground themselves in an understanding of the local society and try to gain an understanding of the priorities of local stakeholders. MNCs should develop an appreciation of the context in which CSR is initiated, as addressing such issues often inspires firms to bring in social innovations in the form of products, services and processes and discover or create opportunities based on the emergent social problems through business solutions that overall benefit their business and local stakeholders.
Originality/value
This is one of the first studies to explore the interaction between MNSs undertaking CSR and business opportunities and innovation in the context of a developing country – Vietnam.
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This study aims to find how trade development and digitalization affect smart-green production. Four factors are investigated in these effects (certification, technology…
Abstract
Purpose
This study aims to find how trade development and digitalization affect smart-green production. Four factors are investigated in these effects (certification, technology innovation, natural resource management, low pesticides).
Design/methodology/approach
The mix-method approach was employed from validating the measurement scale to test the proposed hypotheses. At first, the grounded theory is the most authoritative and standard research method in qualitative research. Secondly, quantitative analysis was employed to draw conclusions about the impact of digitalization and trade development on smart-green agricultural production.
Findings
The results found that digitalization and trade development impact the development of smart-green agricultural production through certification employment, technology innovation, and a decrease in pesticide usage. Moreover, digitalization and trade development also indirectly affect the development of intelligent green agricultural production. Meanwhile, digitalization has a higher impact than trade development.
Research limitations/implications
This research is based on the premise that digitalization and trade development can drive smart green agricultural production. Still, some studies have found a deviation between trade development and environmental protection. Hence, future research can explore the incentive effect of trade development and digitalization on other industries. Second, the measurement of the dependent variables in this study is based on the premise that smart-green agricultural production has not been widely promoted, so the changes in production before and after the whole public participation in smart-green output have yet to be reflected.
Originality/value
Smart green production in agriculture is essential for a transition economy and the world to meet food security and protect the environment. However, the effects of certification, technology innovation, natural resource management, and low pesticides on smart-green agriculture production have yet to be identified. Insights from this study can help governments, policy-makers, and farmers in emerging economies by adapting their strategies within their local contexts.
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Hoang Van Cuong, Hiep Ngoc Luu, Loan Quynh Thi Nguyen and Vu Tuan Chu
The purposes of this paper are twofold. First, it analyses the income structure in cooperative financial institutions and examines how traditional and non-traditional incomes are…
Abstract
Purpose
The purposes of this paper are twofold. First, it analyses the income structure in cooperative financial institutions and examines how traditional and non-traditional incomes are related. Second, it evaluates whether increasing diversification towards non-traditional incomes facilitates or hampers the benefits of financial cooperative owners.
Design/methodology/approach
Data are collected from over 3,100 US credit unions over the period of 1994–2016. A number of modern econometric techniques are employed throughout the analysis, including the use of panel fixed effect, generalised method of moments (GMM) and two-stage least square (2SLS) methodologies.
Findings
Using US credit unions as the empirical setting, the empirical results reveal that the expansion of traditional income leads to a corresponding increase in income from non-traditional activities. However, an increasing reliance on non-traditional income causes a significant drop in interest margins. The authors also find that the extent to which income diversification affects owner benefit varies across credit union types and period of time. While income diversification negatively affects owners' benefits in single common bond credit unions, it has no significant influence on multiple common bond and community credit union owners' benefits. Third, diversification can be beneficial during crisis time, but can be detrimental to owner benefit during normal time.
Originality/value
This paper provides some of the first empirical investigations on the diversification strategy of cooperative financial institutions. Therefore, the results offer significant policy implications for policymakers and market participants on whether financial cooperatives should diversify or specialise.
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Hiep Ngoc Luu, Loan Quynh Thi Nguyen, Quynh Huong Vu and Le Quoc Tuan
The purpose of this paper is to investigate the impact of income diversification on the financial performance of commercial banks in Vietnam over the period 2007–2017. It then…
Abstract
Purpose
The purpose of this paper is to investigate the impact of income diversification on the financial performance of commercial banks in Vietnam over the period 2007–2017. It then provides additional analysis to examine whether the diversification–performance nexus is conditioned upon bank experience and ownership structure.
Design/methodology/approach
The financial information of each bank were manually collected from bank annual reports. In the empirical model, a number of modern econometric techniques, including panel OLS with fixed effects and a two-step system GMM estimator, were utilised to achieve the research objectives.
Findings
The empirical results show that income diversification has a positive impact on banks’ performance. However, the effect varies across different types of banks. Specifically, the authors find that while diversification benefits state-owned and foreign banks, it exhibits a detrimental effect on the financial performance of other non-state owned domestic banks. In addition, the authors further find that the positive impact of diversification is more prominent for banks with more experience in the market.
Originality/value
This study is among the first to empirically investigate the relationships between income diversification and the financial performance of commercial banks in Vietnam. In this sense, the findings of this study could draw important inferences for researchers, policy makers and bank managers towards more appropriate diversification strategies, to ensure the safety and soundness of the whole banking system.
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Hiep Ngoc Luu, Ngoc Minh Nguyen, Hai Hong Ho and Vu Hoang Nam
The purpose of this paper is to empirically investigate the impact of corruption on foreign direct investment (FDI) and its two major modes of entry: greenfield investment…
Abstract
Purpose
The purpose of this paper is to empirically investigate the impact of corruption on foreign direct investment (FDI) and its two major modes of entry: greenfield investment (greenfield) and cross-border mergers and acquisitions (M&As).
Design/methodology/approach
Data are collected from 131 countries. Modern econometric techniques, including the generalized method of moments (GMM) estimator, two-stage least square estimator and two-step system GMM estimator, are used to evaluate the impact of corruption on FDI activities.
Findings
The empirical results illustrate that corruption is a deterioration factor that significantly hinders FDI inflows. However, this finding turns out to be contradictory when the two major components of FDI – greenfield investment and cross-border M&As – are separately examined. Specifically, while corruption consistently discourages cross-border M&As over time, it appears to exert positive effect on greenfield investments.
Originality/value
This is among the first to empirically examine the impact of corruption on FDI and its modes of entry in a number of countries spanning different time windows. In this sense, this paper also captures the changing nature of societies and economic conditions overtime and, therefore, enable academic researchers, policy-makers and business practitioners to draw broad inferences from the empirical results.
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Thinh Gia Hoang, Trang Kieu Vu, Ha Tuyet Nguyen and Hiep Ngoc Luu
This paper aims to enrich our understanding of whether mandatory IR adoption lures firm into misreporting or forces them to reduce it.
Abstract
Purpose
This paper aims to enrich our understanding of whether mandatory IR adoption lures firm into misreporting or forces them to reduce it.
Design/methodology/approach
The empirical analysis is carried out based on the sample containing all publicly listed firms in South Africa. Many different rigorous econometric techniques are adopted to thoroughly evaluate whether corporate misreporting practices increase or decrease following the mandatory adoption of IR.
Findings
The empirical results reveal that mandatory IR disclosure results in a decline in the misreporting practices of firms. The authors further find that as firms increasingly comply with the IR guidelines, especially with the “Content Elements” and “Guiding Principles,” their misreporting levels decrease.
Research limitations/implications
This study has implications for a wide range of stakeholders, especially for regulatory authorities, international policymakers and regulators, as well as users of integrated reports of listed firms on the Johannesburg Stock Exchange (JSE).
Practical implications
Regulatory authorities should be aware of misreporting determinants to set adequate and fitting corporate reporting standards that restrict the opportunistic behaviour of managers and amend IR guidelines to make them more comprehensible for integrated report preparers, therefore improves the implementation of IR.
Social implications
This study sheds light on the current state and consequences of IR adoption in South Africa before and after the mandatory IR disclosure requirement, thus, international policymakers and regulators can refer to the critical aspects in our findings when considering whether to support IR mandatory adoption in their markets.
Originality/value
This paper sheds light on the emerging debate over the usefulness of IR and the necessity of mandatorily adopting this new reporting framework. In addition, by showing that the mandatory adoption of IR significantly reduces corporate misreporting practices, we also contribute to the literature on corporate misreporting behaviour.
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Hiep Ngoc Luu, Loan Quynh Thi Nguyen and Lan Thi Mai Nguyen
This paper investigates the impact of foreign direct investment (FDI) on infrastructure development, focusing on electricity, transportation and telecommunication.
Abstract
Purpose
This paper investigates the impact of foreign direct investment (FDI) on infrastructure development, focusing on electricity, transportation and telecommunication.
Design/methodology/approach
The study employs multivariate regressions on panel data from up to 165 countries over the period 1996–2015, and the instrumental variables two-stage least squares (IV-2SLS) approach to address endogeneity concerns.
Findings
The results show that FDI promotes most types of infrastructure in the recipient countries. In addition, we find that greenfield investments generally contribute toward infrastructure development, while cross-border M&As exhibit only a little developmental impact and may even exert a negative influence on some infrastructure types. Finally, we find that FDIs have a larger developmental impact on developing nations during the period from 1996 to 2015.
Practical implications
Our findings suggest that, while policies which aim to attract further FDI may yield desirable developmental outcomes, a closer look at particular FDI strategies is required when implementing such policies to ensure a sustainable FDI-development nexus.
Originality/value
This study is among the most comprehensive studies in terms of both the time period and the number of countries analyzed, offering a critical examination of the impact of FDI on infrastructure development. At the same time, by decomposing total FDI into its two major strategies (i.e. greenfield investment and cross-border M&As), we also join the line of work that examines the mechanisms through which FDI affects the development of recipient countries. Finally, it highlights that FDI significantly impacts developing nations, particularly in infrastructure projects affected by corruption. Conversely, in developed countries, FDI may hinder domestic investment and long-term growth.