Ownership structure, tax avoidance, and finacial performance: Evidence from listed firms in Vietnam

Abstract

This study investigates the impact of ownership structure on firm financial performance, with tax avoidance acting as a mediating mechanism in the context of Vietnam. Using panel data from 426 non-financial firms listed on the Vietnamese stock market over the period 2015-2024, the study employs fixed-effects estimations to examine both the direct and indirect relationships among ownership structure, tax avoidance, and financial performance. The empirical results indicate that ownership structure exerts heterogeneous effects on corporate tax avoidance and firm performance. In particular, state ownership significantly reduces the level of tax avoidance, whereas institutional ownership and foreign ownership encourage tax planning strategies. Furthermore, tax avoidance exhibits a strong and statistically significant positive association with financial performance, suggesting that it serves as an important transmission channel through which ownership structure influences firm outcomes. These findings imply that tax avoidance may generate financial value when it operates under appropriate governance mechanisms and monitoring structures. The study contributes to the corporate governance literature by providing new empirical evidence on the behavioral channel linking ownership structure and firm performance in an emerging market setting.