Does corporate governance add value to target price forecast in developing markets: the context of Vietnam

This study examines corporate governance factors that influence the accuracy of target price forecasts, with a focus on board independence, CEO duality, institutional ownership, and state ownership. Utilizing a sample of 3,023 report observations from 32 securities firms covering 194 listed companies in Vietnam from 2020 to 2022, the research employs robust OLS regression with industry and year-fixed effects to account for sectoral and temporal influences. The findings indicate that board independence and CEO duality are associated with lower prediction accuracy, results that differ from those observed in developed markets. Institutional ownership and state ownership significantly reduce forecast errors, with state ownership showing a particularly strong impact. Moreover, firms with greater overall analyst coverage and those audited by Big 4 firms tend to exhibit lower forecast errors. Conversely, buy recommendation reports are linked to higher errors, reflecting potential analyst optimism bias. The study emphasizes the distinct governance dynamics in developing markets and offers valuable insights for managers, analysts, and investors aiming to improve forecast accuracy and corporate transparency.