The relationship between financial flexibility strategy and firm performance and the role of corporate governance: evidence from Southeast Asia

This study investigates the relationship between financial flexibility strategy and firm performance, as well as the role of corporate governance in this relationship. We used a sample of 364 listed firms in five emerging Southeast Asian economies – Vietnam, Malaysia, Thailand, Indonesia, and the Philippines – for the 2017–2021 period. We used the fixed-effects model and the generalized method of moments to derive important findings. First, we found a positive relationship between financial flexibility strategy and firm performance. Second, we found that corporate governance plays an important role in enhancing such relationships. These findings are consistent in both stable and crisis economic periods.