This paper examines the role of debt resulting from bank financing for corporate governance towards the activities of withdrawing cash and assets to controlling shareholders? account to benefit their rights by capturing secondary data for 250 non-financial firms listed in the Vietnam Index, considered as one of the emerging stock markets, during the period from January 2006 to December 2016. The authors build three models to investigate in explaining whether the negative impact of intercorporate loan on predicted firms? performance or not, the level of constitution by the aforementioned loans to debt financing and the simultaneous influence of both debt and these loans to firms? performance. We employ two regression methods including system Generalized Method of Moments (system-GMM) as well as Two Stage Least Squares (2SLS) for estimating three proposed models to ensure consistent and unbiased results. The findings show that the Vietnamese companies could use debt to control the majority shareholders? expropriation. However, the overuse bank financing and weak corporate governance might adversely lead to future firms? performance.
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