| Abstract
This study investigates how CEO characteristics influence firm performance in the context of Vietnam, an emerging market. The dataset comprises 30 publicly listed companies on the Ho Chi Minh City Stock Exchange (HOSE) over the period 2010–2023. The Ordinary Least Squares (OLS) and quantile regression methods are employed as the primary estimation technique. The findings indicate that CEO age and tenure, have a statistically significant and positive impact on firm performance when measured by Return on Assets (ROA) as well as Return on Equity (ROE), underscoring the importance of managerial experience and qualifications in enhancing shareholder value. Conversely, CEO ownership is found to be negatively associated with ROE, suggesting that concentrated control may reduce governance efficiency, potentially due to weakened oversight or entrenchment effects.
Research purpose: This study aims to empirically examine the effects of various CEO characteristics—including age, tenure, duality, educational background, gender, and ownership stake—on the financial performance of publicly listed companies in Vietnam, specifically those in the VN30 index. The research intends to uncover both average and distributional impacts of these CEO traits on firm profitability, measured by ROA and ROE, to provide a nuanced understanding of leadership influence in an emerging market context.
Research motivation: The motivation stems from the growing recognition that CEOs’ personal attributes significantly shape firms’ strategic directions and outcomes, yet empirical evidence in emerging markets like Vietnam remains sparse. Prior research has predominantly focused on developed economies, leaving a gap concerning how CEO characteristics manifest impacts under the dynamic and evolving corporate governance environment of Vietnam’s stock market. Addressing this gap offers important insights for both academia and practitioners navigating leadership selection and corporate governance in transitional economies.
Research design, approach, and method: This study adopts a quantitative research design using a panel dataset of 30 VN30 companies listed on the Ho Chi Minh City Stock Exchange over the period 2010 to 2023. The empirical analysis applies two main econometric methods: Pooled Ordinary Least Squares (OLS) regression to estimate the average effects of CEO characteristics on firm performance indicators (ROA and ROE), and Quantile Regression to explore heterogeneous impacts across different levels of financial performance. CEO characteristics examined include duality, age, gender, educational background, ownership, and tenure, while firm-level control variables account for size and age. This combination of methods allows for a comprehensive assessment of both mean and distributional relationships between leadership traits and corporate outcomes.
Main findings: The findings demonstrate that CEO age and tenure possess strong, positive, and statistically significant impacts on firm performance indicators ROA and ROE, confirming the critical role of experience and leadership stability in enhancing profitability. CEO duality is found to positively influence ROA, especially in high-performing firms, while CEO ownership shows a negative association with ROE, indicating governance risks associated with concentrated control. Educational background and gender reveal mixed effects, highlighting contextual nuances in Vietnam’s corporate landscape. The quantile regression results emphasize heterogeneity, with CEO characteristics impacting firms differently depending on their performance strata.
Practical/managerial implications: These results suggest that firms should carefully consider CEO experience and tenure in succession planning and leadership development to foster sustainable financial performance. The positive role of duality in asset efficiency calls for balancing centralized authority with adequate governance safeguards to optimize decision-making. Moreover, the negative implications of concentrated CEO ownership underscore the need for strengthened supervisory mechanisms. The nuanced effects of education and gender imply that supplementary managerial training and inclusive policies could further enhance leadership effectiveness in Vietnam’s evolving market environment. |
