The relationship between state ownership, foreign ownership and firm performance - The empirical study of the comparison between VN30 listed companies and the group of randomly chosen listed companies in Ho Chi Minh Stock Exchange (HOSE)

Abstract

The purpose of this research is to investigate the relationship between corporate ownership structure and the firm performance. To be more specific, state ownership and foreign ownership are chosen to be conducted the relationship between them and firm performance including both market-based and accounting-based methods of Vietnamese listed companies in Ho Chi Minh Stock Exchange (HOSE). This study puts an effort to figure out how the relationship between state along with foreign ownership and firm performance is. It can be hypothesized that state ownership positively impacts on firm performance as well as the negative relationship between foreign ownership and firm performance. This research also aims to figure out the difference of the mentioned relationships between listed companies in VN30 basket and the group of randomly chosen from the rest of listed companies on HOSE. The study tries to make clear that whether the state, foreign ownership has a stronger impact on firm performance within the group of VN30 listed companies in comparison with the rests. Multiple regression models will be applied to test the research hypotheses, with some control variables including firm size, firm age, financial leverage, investment, profitability. Due to the result of this research, it can be highlighted that state ownership has a negative impact on firm performance as well as this ownership in VN30 listed companies has a stronger impact on firm performance in different with the others. Furthermore, foreign ownership has a positive effect on firm performance. Similar to the case of state ownership, the latter ownership also has a stronger impact on firm performance within VN30 listed companies in comparison with the others. The results are all statistical significant for market-based methods at the level of 5%. In contrast, the results show a little bit of difference with the accounting-based methods representing by ROA. State ownership is proved that having positive impact on firm performance calculated by ROA. However, the regression results with ROA are statistically insignificant. Through these findings, it is true that listed companies in VN30 basket are more attractive in comparison with others due to their some specified characteristics. Both state