INTRODUCTION
Research background
Leadership development is essential in every firm, as leaders represent the company and hold the legal authority to make critical decisions that shape its future Their choices significantly impact both short-term and long-term business outcomes, including the creation of development strategies, investment decisions, and key appointments Effective leadership can lead to increased profits, stable employee income, and societal value The unique characteristics of each leader, influenced by their mindset, personality, and spiritual beliefs, play a crucial role in the firm's operations In a culturally rich country like Vietnam, these spiritual factors may further affect business results, highlighting the importance of understanding leadership dynamics in driving organizational success.
Spiritual culture has long been an abstract concept that challenges modern scientific explanation, sparking curiosity among scientists and researchers globally, including in Vietnam Studies have explored how spiritual factors influence the behavior of corporate boards worldwide For instance, Rong (2020) analyzed the impact of astrology on corporate performance metrics such as ROA, ROE, and Tobin's Q, revealing that negative zodiac influences can lead to lower firm performance during a manager's zodiac year Additionally, research by Fisman and colleagues titled “Superstition and Risk-Taking: Evidence from Zodiac Year Investment in China” found that chairmen often exhibit a significant aversion to risky investments during their zodiac year, opting to avoid certain business ventures perceived as conflicting.
Research by Fisman et al (2019) reveals that the negative impact of zodiac signs on company performance remains significant, regardless of the measures taken to mitigate it.
Research in Vietnam reveals a lack of evidence and studies on the application of spirituality in socio-economic contexts While numerous studies have examined the impact of factors like gender, qualifications, and nationality of CEOs and Board Chairmen on business performance, none have explored the influence of the Ganzhi (Can Chi) factor in relation to the age of CEOs and Board Chairmen alongside the years of business operation Furthermore, there is no comprehensive research analyzing the effects of spiritual factors on these leaders This gap has motivated the researcher to pursue a unique study in Vietnam, aiming to propose solutions that address superstitions and enhance spiritual factors to optimize profits for commercial banks.
Research objectives
Cultural spirituality and superstition present complex concepts that are difficult to define solely through modern scientific methods This intriguing topic has captured the interest of scientists and researchers globally, including those in Vietnam Notably, current research in Vietnam reveals a lack of evidence regarding the impact of superstition on business performance within enterprises.
Some investors still base their financial decisions on superstitions, such as lucky numbers, Feng Shui, and zodiac signs, which can lead to unpredictable and often negative outcomes This has motivated researchers to further explore this unique topic in Vietnam, aiming to provide recommendations that mitigate the adverse effects of superstitions while promoting beneficial spiritual factors for investors.
Research question
This research aims to elucidate the impact of Ganzhi on the business performance of enterprises The study will specifically address the question of how Ganzhi influences various aspects of business performance.
Ganzhi on the business performance of enterprises, The influence of CEO’s, chairman in their Zodiac year on the business performance of the enterprise.
New contributions
This research aims to explore the impact of Ganzhi on enterprise business performance, providing valuable insights and a fresh perspective on this topic As there has been no prior research on this subject in Vietnam, this study is expected to be the first to examine the relationship between spiritual culture and business performance By understanding this influence, investors in Vietnam can make more informed financial decisions, moving away from relying on numerical superstition as a gambling strategy for investment.
Research structure
Chapter 1: Introduction: Introducing the content of the dissertation, the objectives and questions as well as the scope of research and the research methodology
Chapter 2: Literature review: Preview the concept and the measurements of the research as well as reviewing the results of previous research papers about the Ganzhi factors that influence the business performance
Chapter 3: Methodology: Listing the data sources and the research method of this dissertation
Chapter 4: Finding and discussion: Illustrating the estimation results, conducting tests to achieve the highest accurate results and interpreting it
Chapter 5: Recommendation and Conclusion: Recommending some policies to help the firm take advantages of Ganzhi factors and review the results and concluded the whole project
LITERATURE REVIEW
Ganzhi and business performance
Ancient China and various Eastern cultures, such as Vietnam, primarily depended on agriculture, particularly rice cultivation The concepts of can and chi were developed in accordance with the growth cycles of plants, especially rice These cultures believed that heaven (Thiên) precedes earth (Địa) Consequently, ancient Chinese philosophers identified the natural laws governing existence and their impact on humanity, categorizing them into two interdependent elements: Heaven and Earth, collectively referred to as Can chi.
The term “Thiên Can” refers to the trunk of the heavenly tree, while “Đia Chi” signifies the branches of the earthly tree This symbolism suggests that heaven serves as the central force, with the earth emerging as a result of its existence.
Ganzhi is derived from the five coordinating elements of yin and yang, represented by the ten heavenly stems: Giáp (1), Ất (2), Bính (3), Đinh (4), Mậu (5), Kỷ (6), Canh (7), Tân (8), Nhâm (9), and Quý (10) Odd numbers are classified as positive (Giáp, Bính, Mậu, Canh, Nhâm), while even numbers are considered negative (Ất, Đinh, Kỷ, Tân, Quý) Additionally, odd days, known as yang days, favor extroverts, whereas even days, referred to as yin days, favor introverts To calculate their own Ganzhi, individuals can use the last digit of their birth year to find their corresponding number A detailed table of Can Chi's heavenly stems is also provided for further reference.
Table 1: Can Chi’s Heavenly Stem
In the Ganzhi system, it is essential to understand the pairs of celestial bodies and their opposites Notably, the compatible pairs include Ất (yǐ) and Canh (gēng), as well as Bính (bǐng) and Tân (xīn).
The heavenly stems include pairs such as Đinh (dīng) and Nhâm (rén), Mậu (wù) and Quý (guǐ), as well as Kỷ (jǐ) and Giáp (jiǎ) Conflicts arise between certain stems: Canh (gēng) clashes with Giáp (jiǎ), Tân (xīn) with Ất (yǐ), Nhâm (rén) with Bính (bǐng), and Quý (guǐ) with Đinh (dīng) Additionally, Giáp (jiǎ) is in conflict with Mậu (wù), Ất (yǐ) with Kỷ (jǐ), Bính (bǐng) with Canh (gēng), Đinh (dīng) with Tân (xīn), and Mậu (wù) with Nhâm (rén), while Kỷ (jǐ) conflicts with Quý (guǐ).
The earthly branches in Ganzhi represent each person's Zodiac sign, corresponding to twelve zodiac animals Odd-numbered Zodiac animals are classified as Yang Chi, while even-numbered ones are categorized as Yin Chi Yin Chi pairs well with Yin Can, whereas Yang Chi is compatible with Yang Can The table below offers detailed information about the Twelve Earthly Branches of Ganzhi.
Table 2: Earthly branches of Ganzhi
Vietnamese Name Represent animals’ zodiac in English
2 丑 chǒu Sửu Water buffalo
Certain Earthly branches are compatible with one another, including the pairs: Water Buffalo with Rat, Tiger with Pig, Dog with Cat, Snake with Monkey, and Horse with Goat Additionally, there are groups of three Earthly branches that harmonize well together, such as Monkey, Rat, and Dragon; Tiger, Horse, and Monkey; Pig, Cat, and Goat; and Snake, Rooster, and Water Buffalo Conversely, some pairs of Earthly branches are considered to be in conflict, including: Pack 1 with Tiger and Monkey, and Snake and Pig; Pack 2 with Dragon and Dog, and Water Buffalo and Goat; and Pack 3 with Rat and Horse, and Cat and Rooster.
The ancient concept of Ganzhi evolved into three significant branches in Asian culture: the Trio Combination year, the Quartet Conflict year, and the Zodiac year Each branch possesses unique characteristics that influence individuals and groups associated with them.
The figure below will illustrate the suitable and conflict of Earthly branch
Figure 1: figure of suitable and conflict Earthly branch
The zodiac animals, as outlined in Table 2, are arranged in a clockwise order starting from Sửu (Water Buffalo) to Hợi (Pig) According to folk beliefs, these 12 zodiac signs are grouped into sets of three, each sharing similar personality traits, which are thought to enhance their luck and strengthen their bonds In Feng Shui, the zodiac animals are categorized into four groups based on common characteristics associated with the elements of Yin or Yang Typically, individuals born in the same zodiac trio share a connection in their life direction and ideals, and these ages are believed to support one another, fostering success in life.
The Trio combination, known as "Tam Hợp," occurs when three animal zodiacs, such as Rat, Monkey, and Dragon, connect to form a triangle, as illustrated in Figure 1.
There are some packs of three zodiac animals that suitable with each other are:
Monkey – Rat – Dragon: persistence group
The three zodiac signs—Rat, Dragon, and Monkey—form a dynamic group characterized by a strong fighting spirit and unwavering determination to achieve their goals They embody the principle that "action speaks louder than words," demonstrating kindness and a readiness to assist others While the Rat is intelligent and agile, it may struggle with confidence in the face of challenges, necessitating the courage and resolve of the Dragon Conversely, the Dragon may sometimes lack creativity, benefiting from the insightful perspectives of the Rat and the Monkey The Monkey, in turn, is empowered by the Dragon's enthusiasm and the Rat's wisdom, creating a harmonious balance among these signs.
Snake – Rooster – Water buffalo: knowledge group
Three zodiac signs are united by a shared passion for knowledge, characterized by their creative minds and forward-thinking nature With strong determination, they relentlessly pursue their goals The Water Buffalo embodies honesty and responsibility, complemented by the agility of the Snake and Rooster Meanwhile, the Rooster's straightforwardness and challenging temperament are balanced by the gentleness and kindness of the Water Buffalo.
Tiger – Horse – Dog: independent group
Individuals in this group typically have a shared passion for freedom and exploring life Horses symbolize emotional depth and creativity, yet they require the decisive strength of the Tiger or the wisdom of the Dog to address challenges The Tiger's fierce nature can be balanced by the gentleness and kindness of the Dog.
Pig – Cat – Goat: Diplomatic group
This group of individuals excels in communication and interpersonal skills, often displaying traits like empathy and a willingness to assist those in need While Pigs are known for their diligence and industriousness, they could benefit from the finesse and agility of Cats to achieve greater success Conversely, Goats and Cats should adopt the hardworking nature of Pigs to enhance their own effectiveness.
Prior studies on Trio Combination year and business performance
When CEOs and chairmen share a trio zodiac compatibility, it fosters better coordination and mutual support in their work, ultimately enhancing the business performance of the enterprise This compatibility often leads to fewer conflicts during decision-making processes.
Measurement of business performance
Profitability is a key metric for assessing a bank's performance, defined as the difference between the income generated and the operational costs incurred Banks primarily earn profits through service fees and interest from their assets, while their main expenses consist of operating costs and interest paid on liabilities.
Banks primarily generate their assets through loans extended to customers and businesses, while their main liabilities arise from customer deposits and borrowed funds, which may come from other banks or through the issuance of commercial paper in the money market.
The Return on Assets (ROA) and Return on Equity (ROE) are key ratios for assessing a bank's profitability and overall performance (Golin, 2001) ROA measures a manager's effectiveness in using assets to generate returns, while ROE evaluates how well equity is utilized to produce profits These indicators facilitate comparisons among banks within the industry Previous studies, including those by Staikouras and Wood (2011) and Olweny and Mamba, have employed ROA and ROE to assess business performance.
Dividend payout is a crucial metric for assessing a bank's performance, reflecting the earnings after tax that the bank distributes to its shareholders This practice indicates a bank's operational strength and effectiveness, fostering shareholder confidence in the management team The Board of Directors determines the dividend policy, including payment dates and methods, which can be in cash or shares Recently, the State Bank of Vietnam mandated that banks pay dividends in shares rather than cash to reduce loan interest rates and enhance capital safety by increasing equity, thereby providing banks with greater credit capacity (Trang, 2022).
Previous research, including studies by Osegbue et al (2014) and Adediran and Alade (2013), has utilized cash dividend payouts as a key measure of business performance Due to its accuracy and widespread acceptance, dividend payout will serve as a crucial indicator for assessing business performance.
Other determinants that influence the business performance of enterprise
Previous research by Jensen (1986) indicates that debt negatively impacts a company's value by discouraging investment in low-return projects, restricting free cash flow, and compelling managers to enhance efficiency to repay debt and boost shareholder value In contrast, Myers and Turnbull (1997) found that an increase in the debt ratio leads to a decline in growth opportunities, suggesting an opposing relationship.
Numerous research studies, both international and local, have explored the connection between financial leverage and enterprise performance in Vietnam Tuan Anh et al (2016) found that financial leverage negatively affects business performance, with varying degrees based on the enterprise's return on equity (ROE) Similarly, Dung (2013) concluded that there is a negative relationship between financial leverage and investment activities of firms Conversely, Tu (2015) highlighted that ROE increases in tandem with the self-financing coefficient ratio, suggesting that greater financial leverage can lead to higher profitability for firms.
2.3.2 Size of the firms (SIZE)
On the other hand, Banz (1981), Lauterbach and Vaninsky (1999), Durand and Coeuderoy
The size of a company is a crucial indicator of its financial strength, managerial capabilities, and production advantages (Tzelepis & Skuras, 2004) Research indicates a positive correlation between firm size and performance, with larger firms typically achieving higher profits (Stanwick & Stanwick, 1998) Subsequent studies by Gleason et al (2000), Adam and Santos (2006), and Zeitun et al (2007) further support this relationship, highlighting the importance of company size in business research.
Research indicates that large-scale firms possess superior management capabilities, specialized skills, and enhanced functionality compared to smaller firms (Daft, 1995) However, several studies, including those by Banz (1981) and Lauterbach and Vaninsky (1999), suggest that the size of a firm has only a minimal positive impact on its overall performance.
Sales growth serves as a key indicator of a company's future potential Businesses experiencing significant sales growth demonstrate their ability to adapt and thrive in a competitive economic landscape.
Research indicates a positive correlation between sales growth rate and company performance, as noted by Rose (2007) Furthermore, Pouraghajan et al (2012) found that this growth rate is directly proportional to performance, measured through Return on Assets (ROA).
2.3.4 Fixed asset investment ratio (TANGI)
Fixed assets are valuable production materials essential for business operations and are involved in multiple business cycles The fixed asset investment ratio reflects a company's level of investment in these assets, significantly impacting enterprise performance Previous studies have yielded varying conclusions regarding this relationship.
Research by Pouraghajan et al (2012) indicates a positive relationship between fixed asset investment ratio and business performance measures such as ROA and ROE However, contrasting studies by Zeitun and Tian (2007) and Onaolapo and Kajola (2010) suggest that substantial investment in fixed assets may not enhance performance and could result in inefficient asset utilization, ultimately negatively affecting business performance.
Research by Zeitun et al (2007) indicates that the age of an enterprise negatively affects its Return on Assets (ROA), suggesting that older companies experience lower operating rates due to diminished demand for upgrades, asset renewals, and product improvements Conversely, a study by Pouraghajan et al (2012) found no significant impact of firm age on business performance, as measured by ROA and Return on Equity (ROE).
The presence of female managers remains low, yet the number of companies led by women is steadily increasing, reflecting a significant shift in the role of women in business (Ho and CTG, 2015) This trend is observed globally and is seen as a vital indicator of feminism in the corporate world Supporting this perspective, Smith and CTG (2006) highlight that female executives bring valuable experiences from both their professional and personal lives, enhancing their understanding of various market segments.
24 businesses than men, thereby increasing the quality and breakthrough in decision making (Singh and Vinnicombe, 2004)
Some studies suggest that companies led by women may be less effective than those managed by men, with Fairlie and Robb (2009) indicating that female-run businesses often experience lower financial performance This is attributed to factors such as limited human resource capital and financial constraints stemming from traditional family business models Additionally, research by Singhathep and Pholphirl (2015) found that female CEOs can negatively affect a company's annual revenue and profit Given these contrasting perspectives, the authors examine the gender variable to better understand its influence on company performance.
A person's educational level is defined as the highest completed education within their national education system Research by Jensen and Zajac (2004) shows that boards with highly educated members are more open to structural or strategic changes, as they can effectively minimize systemic risks through their strategic insights, problem-solving skills, and comprehensive understanding of business operations Numerous international studies have identified common traits among effective boards of directors (BOD) and successful businesses, consistently highlighting that top management with specialized knowledge and a clear grasp of operational mechanisms leads to improved business performance (Hambrick and Mason, 1984; Kor and Sundaramurthy, 2008) Consequently, education level was selected as a key variable for this study.
Experience is defined by the duration of the management board's tenure in their current roles Peni's study (2014) indicates that senior executives often outperform their counterparts with greater experience, a finding that is consistent with the research conducted by Baysinger and Hoskisson.
Experienced executives with long tenures possess deeper knowledge and a better understanding of the company, which significantly contributes to improved performance Their extensive experience enhances their expertise, allowing them to make more informed decisions that benefit the organization.
Jensen (1986) proposed that increasing the ownership ratio for managers fosters a consensus of interest between shareholders and management Supporting this view, Brickley et al (1988) discovered that stock ownership enhances managers' leadership abilities and enthusiasm for the company Additionally, research by Elisa et al (2013) confirms a positive correlation between management's share ownership ratio and company performance.
METHODOLOGY
Research Data
The researcher developed a dataset using data from annual reports of companies listed on HOSE, HNX, and UPCOM To achieve the research objectives, data was gathered from 2011 to 2021 through financial statements and annual reports available on the official websites of each enterprise This included collecting information on the financial position of the enterprises, specifically the items listed on their balance sheets.
The research will gather data from the annual reports of 24 banks listed on the HOSE, HNX, and UPCOM stock exchanges, focusing on key leadership details such as the chairman and general director's year of birth, individual stock ownership percentage, educational background, number of positions held in other organizations, and gender The total observations for this study amount to 264.
Model specification
This study aims to assess the influence of leadership characteristics on the business performance of enterprises, utilizing the model proposed by Xiang et al (2018) The research will employ Fixed Effect regression combined with Cluster-Robust estimation to address issues related to variance and autocorrelation.
The model incorporates variables such as age, gender, education, experience, and ownership to analyze the dividend payments of enterprises The findings from this model serve as a foundation for providing investment recommendations to potential investors in the company.
To assess the impact of Can Chi on enterprise performance, the author analyzed various enterprise characteristics using the variable \(PERF_{it}\) Drawing on Manh's (2020) research, the study employs Return on Assets (ROA) and Return on Equity (ROE) as key performance indicators Specifically, \(ROA_t\) reflects the company's total profit, while \(ROE_t\) effectively represents the profit generated for shareholders Additionally, cash dividend payments throughout the year serve as an indirect indicator of operational performance.
27 efficiency of the enterprise (DIVE) This can be understood as, when the operation of the business effective, they will extract a portion of profits to pay dividends to investors
ZODIAC analyzes the ages of business leaders during their respective zodiac years, as researched by Yi Xiang et al (2018) It includes variables for the zodiac year of leadership (ZODIYEAR_GD, ZODIYEAR_CT) and further expands on the leaders' ages according to Can Chi during the year of Tam Hop (TRIOCOM_GD, TRIOCOM_CT) and the year of Tu Xung (QUARTETCON_GD, QUARTETCON_CT).
This article examines various factors influencing business performance, including firm size (SIZE), sales growth rate (GROWTH), financial leverage (LEV), fixed asset investment ratio (TANGI), business age (AGE), leadership gender (GENDER), education level (EDU), experience (EXP), and individual stock ownership ratio (OWNER).
Variable name Variable Sign Measurement
1 Return on Asset ROA Profit after tax / total asset
2 Return on Equity ROE Profit after tax / Equity
3 Dividend payment DIVE Cash dividend payment during the year (%)
1 The age of the leader in the year of the zodiac
ZODIYEAR If the operation year falls in the zodiac year (The year has the same zodiac animal as the leader's), then NAMTUOI = 1 and vice versa NAMTUOI = 0
2 The age of the leader in the year Tam Hop
TRIOCOM If in year Tam Hop then
TAMHOP=1 and other wise TAMHOP = 0 (0/1)
3 The age of the leader in the year Tu Xung
QUARTETCON If in year Tu Xung then
TUXUNG=1 and other wise TUXUNG = 0 (0/1)
1 Financial leverage LEV Total debt / Equity
2 Firm’s size SIZE Log (Total asset)
3 Sales growth rate GROWTH Log (Next Period Revenue /
TANGI Fixed asset / total asset
5 Enterprise age Age Difference between year of data collection and year of establishment (Age)
6 Gender GENDER If leader’ gender is male then
7 Board of Director’ education level
EDU EDU = 1 if the leadership has postgraduate qualification and otherwise EDU = 0
8 Experience EXP Number of years of management in current position
OWNER Percentage of individual stock ownership in the company
Estimation method
This research employs both quantitative and qualitative methods The qualitative aspect involves utilizing statistical techniques to assess the findings of prior studies, providing an overview of how independent variables influence dependent variables In contrast, the quantitative approach analyzes a collected dataset through multiple regression models.
Stata 14.2 software was applied in this dissertation The data in this dissertation is panel data because this data is collected from 24 Vietnamese commercial banks from 2011 to 2022 With the combination of the time series of cross-observations, the panel data generate the data that contains more useful information, more variability, less collinear phenomena between variables, and is more effective
In the regression analysis, three models were evaluated: the Pooled Ordinary Least Square Model (POLS), the Fixed Effect Model (FEM), and the Random Effect Model (REM) The Hausman test was employed to determine the most suitable model, with the one yielding the best results being selected Additionally, issues such as Heteroskedasticity, Autocorrelation, and Multicollinearity were addressed to enhance the model's robustness The estimation results will be presented in the following chapter.
FINDINGS AND DISCUSSION
Descriptive statistics
The research reveals that the average Return on Assets (ROA) for the studied enterprises is 0.008 (0.8%), while the Return on Equity (ROE) stands at 0.10 (10%) The average Dividend Payout Ratio (DIVE) is 190.8, with a maximum of 2250, indicating that cash dividends average only 191 VND per share This trend can be attributed to recent regulations by the State Bank of Vietnam mandating banks to distribute dividends in shares Among the independent variables, 13.6% of CEOs were born in the year of the Trio Combination, 24.6% in the year of the Quartet Conflict, and only 8% in the Zodiac year Additionally, 13.6% of company chairmen were born in the Trio Combination year, 27% in the Quartet Conflict year, and 8.3% in the Zodiac year.
For the control variables group, the average enterprise size of the studied companies is 8.11, and the average growth rate of enterprises is 0.17 The average leverage ratio of enterprises is 13.2 and some enterprises up to 111.01, which is understandable because due to the characteristics of the industry, banks often have a high proportion of debt compared to equity The average age of enterprises is 23.5 years old and there are enterprises with a relatively high age of 64 years old The mean fixed asset investment coefficient is 0.012 with a standard deviation of 0.01 The gender variable of CEO and chairman have mean values of 0.18 and 0.15 respectively, indicating that the majority of enterprises’ leaders are male In terms of education level, 81% of CEOs and 59% of presidents have a master’s degree or higher, which shows that the company's leaders often have a wide range of education and knowledge Finally, the number of years of experience of the chairman is 5 is greater than that of the general director is 4.7.
Variable Obs Mean Std Dev Min Max
The correlation coefficient is a statistical measure used to determine the strength of a linear relationship between two variables The author's analysis reveals that the correlation coefficients of the independent variables are below 70%, indicating that these variables are appropriate for use in a regression model due to their low correlations.
Diagnostic tests and define regression models
4.2.1.Model of CEO’s Trio Combination year with business performance (TRIOCOM_GD)
V.I.F test for multicollinearity (ROA model)
The multicollinearity test aims to assess the correlation among independent variables The model results indicate that the Variance Inflation Factor (VIF) for all variables is below 2, with a mean VIF of 1.42, demonstrating the absence of linearity among the independent variables Therefore, these independent variables are suitable for regression analysis.
Breusch and Pagan Lagrangian multiplier test (ROA model)
This study utilized the Breusch and Pagan Lagrangian multiplier test to determine the appropriate model between the Pooled Ordinary Least Square Model (POLS) and the Random Effect Model (REM) The null hypothesis of the LM test posits that there are no significant variances across entities, indicating the absence of a panel effect.
The Breusch and Pagan Lagrangian multiplier test for the ROA model yielded a P-value of 0.0000, which is less than 0.05, leading to the rejection of the null hypothesis Consequently, the random effects model is deemed appropriate.
This study employed the Hausman test to determine the suitability of the Fixed Effect Model (FEM) versus the Random Effect Model (REM) The null hypothesis of the Hausman test posits that the REM is the appropriate model to use.
H 0 : Random effect model is appropriate
H 1 : Fixed effect model is appropriate
The Hausman test results for the ROA model indicate a P-value of 0.0000, which is less than the significance level of 0.05 This leads to the rejection of the null hypothesis, confirming that the fixed effect model is the most appropriate choice for the ROA model.
Modified Wald test for groupwise heteroskedasticity (ROA model)
This study employed the Modified Wald test to investigate the presence of heteroscedasticity errors in the fixed effect model The null hypothesis posits that homoskedasticity, or constant variance, is present.
The result of the Modified Wald test for the ROA model is P-value = 0.0000 (< 0.05) and the null hypothesis is rejected Therefore, the model appears heteroskedasticity error
Wooldridge test for autocorrelation (ROA model)
The Wooldridge test is used to test the serial correlation of the model with the null hypothesis is: no first-order autocorrelation
The result of the Wooldridge test for the ROA model is P-value = 0.000(< 0.05) and the null hypothesis is rejected Therefore, the model has serial correlation
This dissertation uses robust commands to correct errors in the ROA model The results are shown in the table below:
ROA Coef St.Err t-value p-value [95% Conf Interval]
Mean dependent var 0.009 SD dependent var 0.006
Number of obs 264 Chi-square 51.025
V.I.F test for multicollinearity (ROE model)
The multicollinearity test aims to assess the correlation among independent variables The model results indicate that the Variance Inflation Factor (VIF) for all variables is below 2, with a mean VIF of 1.35, demonstrating the absence of linearity among the independent variables Therefore, these independent variables are suitable for regression analysis.
Breusch and Pagan Lagrangian multiplier test (ROE model)
This study utilized the Breusch and Pagan Lagrangian multiplier test to determine the appropriate model between the Pooled Ordinary Least Square Model (POLS) and the Random Effect Model (REM) The null hypothesis of the LM test posits that there are no significant variances across entities, indicating the absence of a panel effect.
The Breusch and Pagan Lagrangian multiplier test for the ROA model yielded a P-value of 0.0000, which is less than 0.05, leading to the rejection of the null hypothesis Consequently, the random effects model is deemed appropriate.
This study employed the Hausman test to determine the suitability of the Fixed Effect Model (FEM) versus the Random Effect Model (REM) The null hypothesis of the Hausman test posits that the Random Effect Model is the appropriate choice.
H 0 : Random effect model is appropriate
H 1 : Fixed effect model is appropriate
The Hausman test results for the ROA model indicate a P-value of 0.55, which is greater than 0.05 This suggests that the null hypothesis cannot be rejected, making the random effect model the most appropriate choice for this analysis.
Modified Wald test for groupwise heteroskedasticity (ROE model)
This study employed the Modified Wald test to investigate the presence of heteroscedasticity errors in the fixed effect model The null hypothesis posits that homoskedasticity, or constant variance, is present.
The result of the Modified Wald test for the model is P-value = 0.0000 (< 0.05) and the null hypothesis is rejected Therefore, the model appears heteroskedasticity error
Wooldridge test for autocorrelation (ROE model)
The Wooldridge test is used to test the serial correlation of the model with the null hypothesis is: no first-order autocorrelation
The result of the Wooldridge test for the model is P-value = 0.000(< 0.05) and the null hypothesis is rejected Therefore, the model has serial correlation
To robust the ROE model, this study has regressed the random effect model with the feasible generalized least squares method (FGLS), the results are illustrated in the table below:
ROE Coef St.Err t-value p-value [95% Conf Interval]
Mean dependent var 0.102 SD dependent var 0.066
Number of obs 264 Chi-square 156.502
V.I.F test for multicollinearity (DIVE model)
The multicollinearity test aims to assess the correlation among independent variables The model results indicate that the Variance Inflation Factor (VIF) for all variables is below 2, with a mean VIF of 1.35, demonstrating the absence of linearity among the independent variables Therefore, these independent variables are suitable for regression analysis.
Breusch and Pagan Lagrangian multiplier test (DIVE model)
This study utilized the Breusch and Pagan Lagrangian multiplier test to determine the appropriate model between the Pooled Ordinary Least Square Model (POLS) and the Random Effect Model (REM) The null hypothesis of the LM test posits that there are no significant variances across entities, indicating the absence of a panel effect.
The Breusch and Pagan Lagrangian multiplier test yielded a P-value of 0.0000, indicating that the null hypothesis is rejected Consequently, the random effects model is deemed appropriate for the analysis.
Discussion
4.3.1 The impact of CEO in Trio Combination year to the business performance of enterprise
The regression analysis results indicate that the variable TRIOCOM_GD is not statistically significant, suggesting that during the General Director's year of significant benefit, there is insufficient evidence to link TRIOCOM_GD to improved business performance, consistent with the findings of Jiarong Li et al (2021) Conversely, model (3) reveals that the CEO’s Trio Combination year is statistically significant, with a positive beta coefficient of 147.4, indicating that the director's age during this year positively influences the enterprise's dividend payments Specifically, the cash dividend payment is expected to increase by 147.4 in the CEO’s Trio Combination year, as directors may perceive this fortune as a blessing, leading them to share their prosperity with others, aligning with the results of Xiang et al (2018).
The control variables SIZE, GROWTH, TANGI, AGE, and LEV are statistically significant in the research model, with SIZE consistently showing a positive beta coefficient across all three models This indicates that larger businesses tend to achieve better results and higher cash dividend payments due to their superior operational capabilities Conversely, the AGE variable negatively impacts business performance with high significance Additionally, LEV demonstrates significant positive effects on firm performance and cash dividend payouts in models (2) and (3) This is attributed to the common practice among Vietnamese banks of financing operations through debt, which enhances financial leverage and increases the debt-to-equity ratio (D/E), ultimately leading to improved return on equity (ROE) and more frequent cash dividend distributions.
The variable TANGI in model (3) reveals a negative impact of fixed asset investment on enterprise dividend payments Conversely, the GROWTH variable demonstrates a statistically significant positive effect on business performance in models (1) and (2).
The variable GENDER_GD_N shows no statistical significance across all three models, while EDU_GD_N is significant in model (3), suggesting that a CEO's education level positively influences the firm's dividend payments Additionally, OWNER_GD is significant in model (1) with a negative beta, indicating that a director's personal stock ownership negatively impacts the company's performance Lastly, EXP_GD lacks statistical significance in all three models.
Table 23: CEO in Trio combination year
4.3.2 The impact of Chairman in Trio Combination year to the business performance of enterprise
The analysis indicates that TRIOCOM_CT lacks statistical significance across all three models In contrast, the control variables SIZE, LEV, GROWTH, and AGE demonstrate statistical significance and exhibit similar effects on business performance as observed in the TRIOCOM_GD study model Additionally, the TANGI variable also fails to show statistical significance in all three models.
In the analysis of control variables, GENDER_CT_N is found to be statistically insignificant across all three models However, EDU_CT_N shows statistical significance in model (1), suggesting that the chairman's experience positively influences business performance Additionally, EXP_CT is significant in models (1) and (3), exhibiting both positive and negative beta coefficients This indicates that while the chairman's experience enhances business performance, it negatively impacts cash dividend payments due to the State Bank of Vietnam's policy favoring dividend payouts in shares rather than cash Consequently, the chairman's experience is inversely related to cash dividends Similarly, the OWNER_CT variable also negatively affects cash dividend payments for the same reasons as EXP_CT.
4.3.3 The impact of CEOs in Quartet Conflict year to the business performance of enterprise
The analysis indicates that QUARTETCON_CD is statistically significant in models (1) and (3), revealing a negative impact on both business performance and cash dividend payouts Specifically, during the CEO's Quartet Conflict year, business performance is expected to decline by 0.1%, attributed to frequent conflicts and disagreements between the director and chairman, leading to poor decision-making Consequently, this discord also results in a substantial reduction in cash dividend payments, with a decrease of 44.1 during the Quartet Conflict year.
The control variables SIZE, LEV, GROWTH, AGE, and TANGI show statistical significance in relation to business performance, aligning with the TRIOCOM_GD study model Conversely, GENDER_CD_N, EDU_CD_N, and EXP_GD lack statistical significance across all three models, indicating insufficient evidence to assert that education level, experience, and gender affect business performance Notably, the variable OWNER_CT is statistically significant in model (1), revealing that directors' personal stock ownership negatively impacts company performance, which may explain the low or absent personal stock ownership among CEOs in the research sample.
4.3.4 The impact of Chairman in Quartet Conflict year to the business performance of enterprise
The analysis reveals that QUARTETCON_CT is statistically significant in model (1) with a beta coefficient of 0.0014, indicating a negative impact on business performance during the chairman's Quartet Conflict year Specifically, this suggests a decrease in business performance by 0.14% This decline can be attributed to frequent conflicts and disagreements between the director and chairman, which often result in poor decision-making and adversely affect the enterprise's performance.
The control variables SIZE, LEV, GROWTH, and AGE demonstrate statistical significance in the research model, showing impacts on business performance consistent with the TRIOCOM_GD study model In contrast, the TANGI variable lacks statistical significance across all three models.
In all models analyzed, GENDER_CT_N is statistically significant, indicating that the gender of the chairman negatively affects the firm's business performance This trend may be attributed to the underrepresentation of women in key leadership roles, as women are often perceived to make decisions based on emotions, while men tend to rely on logic Consequently, emotionally-driven decisions may not be optimal and can adversely impact the enterprise's performance.
The variable EDU_CT_N is statistically significant in models (1) and (3), demonstrating that the chairman's experience positively influences business performance and cash dividend payouts Additionally, EXP_CT is significant in both models, exhibiting both positive and negative beta coefficients, indicating a complex relationship with the experience variable.
The experience of the chairman positively influences business performance but negatively impacts cash dividend payments This occurs because seasoned chairmen are adept at making profitable decisions, yet they face pressure from the State Bank of Vietnam's policy mandating dividend payouts in shares rather than cash Consequently, the chairman's experience correlates negatively with cash dividends Similarly, the variable OWNER_CT also adversely affects cash dividend payments for the same reasons as EXP_CT.
4.3.5 The impact of CEOs in Zodiac year to the business performance of enterprise
The analysis indicates that ZODIYEAR_CD lacks statistical significance across all three models In contrast, the control variables—SIZE, LEV, GROWTH, AGE, and TANGI—demonstrate statistical significance in the research model, showing impacts on business performance that align with the findings from the TRIOCOM_GD study model.
The control variables GENDER_CD_N, EDU_CD_N, and EXP_GD show no statistical significance across all three models, indicating insufficient evidence to suggest that education level, experience, and gender affect business performance In contrast, the variable OWNER_CT is statistically significant in model (1), revealing that personal stock ownership by directors negatively impacts company performance This finding explains the tendency for many CEOs in the research sample to maintain low or no personal stock ownership in their firms.
4.3.6 The impact of Chairman in Zodiac year to the business performance of enterprise