Foreign Ownership, Foreign Board Members, and Firm Performance: The Moderating Roles of Leverage and Solvency in an Emerging Market
Hanh Thi My Le, Hieu Trung Le
Keywords:
Internationalization, foreign ownership, foreign board members, firm performance, Vietnam, emerging market
Abstract:
This study explores the relationship between foreign characteristics and firm performance by examining the impact of foreign ownership and the presence of foreign board members. It provides empirical evidence on the role of foreign participation in enhancing firm performance during the COVID-19 pandemic and the subsequent recovery period. Using a dataset of 359 non-financial firms listed in Vietnam—an emerging market—between 2017 and 2023, with over 2,500 observations, our findings reveal that foreign characteristics play a crucial role in improving firm performance. Specifically, foreign ownership has a positive and significant effect on both market value (Tobin's Q) and return on assets (ROA). The consistent positive impact across different periods highlights the substantial benefits that Vietnamese firms gain from foreign investors. However, while the presence of foreign board members appears beneficial, its impact on firm performance remains inconclusive across different time frames. Moreover, the interaction between foreign ownership ratio and leverage ratio (FO_LEV) has a significantly negative effect on ROA, suggesting that a high debt ratio weakens the positive influence of foreign ownership. These findings offer valuable insights for policymakers and business leaders in developing strategies to attract foreign investment, enhance corporate governance, and strengthen firms’ competitive advantages in the global market.
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 Foreign Ownership, Foreign Board Members, and Firm Performance: The Moderating Roles of Leverage and Solvency in an Emerging Market [PDF file] [Filesize: 772.67 KB]
 10.7441/joc.2026.03.13
Le, H. T. M., & Le, H. T. (2026). Foreign ownership, foreign board members, and firm performance: The moderating roles of leverage and solvency in an emerging market. Journal of Competitiveness, 18(3), 382–413. https://doi.org/10.7441/joc.2026.03.13
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