The Association among Corporate Governance, Corruption, and Economic Prosperity in the Socialist Republic of Vietnam

Accounting, Economics, and Law: A Convivium, Forthcoming

62 Pages Posted: 14 Jun 2019

See all articles by Marius Gros

Marius Gros

Goethe University Frankfurt - Department of Accounting and Auditing; Niederrhein University of Applied Sciences

Tobias Henke

Vietnamese-German University

Date Written: May 31, 2019

Abstract

The OECD considers compliance with the OECD principles of corporate governance and reduced corruption to be positively associated with economic prosperity. Prior empirical research supports this notion for developed countries. However, findings for developing and emerging countries are more diverse, as some studies document an “East Asia paradox” and link higher levels of corruption with positive outcomes at the firm or country level. Our case study on the Socialist Republic of Vietnam contributes to the literature by identifying determinants of these mixed findings. Relying on triangulation, our results suggest that internationalizing and international firms must adhere to OECD expectations to prosper, while domestic firms prefer operating in corrupt but stable conditions. Due to this mechanism, noncompliance with OECD principles and corruption can deter foreign direct investments and thus negatively influence economic growth. Nevertheless, noncompliance with OECD principles and corruption can still work to benefit domestic firms. Given our results for Vietnam, we argue that the internationalization of the business models of the firms analyzed might explain the prior inconclusive empirical findings.

Keywords: OECD principles of corporate governance; corruption; Vietnam; economic prosperity; case study

JEL Classification: F63; M48; N45; O53

Suggested Citation

Gros, Marius F. and Gros, Marius F. and Henke, Tobias, The Association among Corporate Governance, Corruption, and Economic Prosperity in the Socialist Republic of Vietnam (May 31, 2019). Accounting, Economics, and Law: A Convivium, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3398236

Marius F. Gros (Contact Author)

Goethe University Frankfurt - Department of Accounting and Auditing ( email )

Theodor-W.-Adorno-Platz 1
60323 Frankfurt
Germany

Niederrhein University of Applied Sciences ( email )

Germany

Tobias Henke

Vietnamese-German University ( email )

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