The Impact of Accounting Conservatism on the Market Value of Construction and Building Materials Listed Companies in Vietnam

Abstract

This study examines the relationship between accounting conservatism and firm market value in Vietnam’s listed construction and building materials sector. Using balanced panel data from 62 firms listed on the Ho Chi Minh City (HOSE) and Hanoi (HNX) stock e xchanges over the period 2020–2024, the study applies the Feasible Generalised Least Squares (FGLS) model to address heteroskedasticity and autocorrelation issues. The empirical results reveal that accounting conservatism has a statistically significant negative impact on firm value, indicating that higher levels of conservatism are associated with lower Tobin's Q. In contrast, leverage, audit quality, and female board representation exert a positive influence on market valuation, while other control variables show no significant effects. Overall, the findings suggest that excessive accounting conservatism may constrain market valuation, whereas strong corporate governance mechanisms and effective financial structures enhance firm value. Based on the results, the study provides practical implications and policy recommendations for managers and policymakers to enhance the market performance of construction and building materials firms in emerging markets, such as Vietnam.