Ownership structure and performance of professional service firms in a declining industry: Evidence from Vietnamese securities firms

This study posits that the declining industry is a good institutional environment to examine the relationship between ownership structure and firm performance of Vietnamese securities firms. This downturn decreases the return on investment of the industry and creates incentives for managers to expropriate shareholders more severely. In addition, different groups of shareholders recognizing the status of the industry may have their own reactions which are likely to affect firm performance. Using pooled OLS regression with a sample of 240 observations from 56 Vietnamese securities firms over the period from 2009 to 2016, we find supporting evidence of convergence-of-interest with a significantly negative relationship between insider ownership and profitability. In addition, foreign ownership is also positively related to firm performance. Firm size affects positively firm performance while number of employees has a negative impact on profitability.