Assessing the influence of corporate governance on stock return volatility in the Vietnam context

This paper contributes to the literature by examining the impact of corporate governance on the stock return volatility of non-financial firms listed on the Vietnamese stock market. Data on corporate governance and stock return volatility among non-financial firms listed in Vietnam were obtained from the Hanoi and Ho Chi Minh stock exchanges. The study employed ordinary least squares, fixed-effects estimations, and the generalized least squares method. The research demonstrates a positive relationship between corporate governance and stock return volatility. The findings emphasize the sustained positive influence of board size on volatility, suggesting that companies aspiring to diminish the annual average standard deviation of equity returns should consider decreasing the number of directors. Furthermore, the results also show the absence of a discernible relationship between board independence and volatility, and the negative effects of both foreign ownership and managerial ownership on volatility. This study provides practical implications for companies and market participants aiming to reduce stock return volatility through good corporate governance within developing capital markets.