A study on the effect of corporate governance and capital structure on firm value in Vietnam

e of applying effective CG 
methods and identifying optimal CS for businesses in developing countries. development in general and in Vietnam in particular. 
The analysis results of the research show that when companies comply and implement CG well, they can make enterprises 
operate more effectively, reduce the agency cost of the business thereby increasing FV. Businesses in Vietnam are mostly small 
and medium-sized enterprises, so expanding the board of directors may result in administrative costs, difficulties in unifying 
and making decisions and can conflicts between members. Therefore, businesses need to build a board suitable to the size of 
the business. A reasonably sized board can make the coordination among the board members better, helping to supervise and 
manage more closely. However, as the business grows to a larger scale, operating in more areas, the CEO of the business needs 
to receive more advice from the members of the board of directors to come up with correct decisions help companies work more 
efficiently. Meanwhile, the expansion of the board size is an indispensable thing that businesses need to do. But to ensure that 
the expansion of the board size is effective for businesses, the board members must be competent, experienced and 
knowledgeable in the field of business operations. Besides, the positive relationship between the independence of the board and 
the firm value is consistent with the views in representation theory. There is always a conflict of interest between the directors 
and the shareholders. Directors make actions and decisions for personal gain and do not focus on the goal of maximizing 
shareholder value and can cause damage to shareholders. Therefore, the Board of Directors was created as a mechanism to 
oversee the activities of the directors in the company. The more independent the board of directors is, the more effective the 
monitoring mechanism is, the more effective the business operations will be and increase the enterprise value (according to the 
market value). Therefore, to strengthen the monitoring mechanism and improve the operational efficiency of the business, it is 
necessary to increase the independence of the board of directors in the enterprise. Regarding gender of the board, based on the 
above research results it can be concluded that diversification in the board is a good choice for businesses, but the election and 
appointment Board members should rely on competencies that will be better for business performance and value for the business. 
Therefore, increasing the percentage of female members on the board of directors can have an important impact on the business 
strategy, thereby raising the company's FV. Research results demonstrate that capital structure has a great influence on the price 
of listed businesses. Therefore, business executives need to pay special attention to debt management accordingly. The results 
also indicate that there is no optimal capital structure that is applicable to all businesses. Depending on the characteristics of the 
business line and the characteristics of each company, the chief financial officer can devise a capital structure that maximizes 
business value. However, businesses also need to consider the burden of interest expenses, interest rate risks, liquidity risks to 
limit the cost of financial exhaustion that may arise when using a large proportion of liabilities. First of all, businesses should 
use internal capital by mobilizing from employees in the enterprise, from the unused capital of the business to pay off bank 
loans. At the same time, businesses need to focus on consolidating the business activities of the business activities to improve 
operational efficiency. Next, when the business efficiency is improved, the financial situation is better, the enterprise can 
increase its equity from retained earnings. As the position and competitiveness are gradually raised, businesses can gradually 
improve the debt usage within the thresholds to invest in business development, by seeking sources that do not require much 
talent. production assurance. Enterprises should expand the form of joint ventures and partners with both domestic and foreign 
partners to have more assets, especially fixed assets with modern technology. From there, businesses can take advantage of the 
management, assets and markets of the partners to enhance the firm value. 
Acknowledgements 
We gratefully acknowledge the financial support from the Vietnam National Foundation for Science and Technology 
Development (NAFOSTED) under Grant Number 502.02-2019.302 
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