| dc.description.abstract | The rise of state capitalism in the 21st century has reignited research on the impact of state
ownership. Current literature indicates that the effect of state ownership onto firm
performance may be beneficial in some cases and detrimental in other cases. There are also
factors which could potentially moderate the relationship between state ownership and firm
performance. In this thesis, we investigate the net impact of residual state ownership on 500
Vietnamese privatised firms listed on the Hanoi and Ho Chi Minh City stock exchanges over
the period of 2007–2017. We first employ semiparametric regression and stochastic frontier
analysis (SFA) to investigate the relationship between residual state ownership and the
performance and efficiency of privatised firms, respectively. Second, we utilise quadratic
regression to investigate the moderating roles of two governmental mechanisms, an
independent government monitoring body (IGMB) which supervises state-owned
enterprises (SOEs) and hardening of soft budget constraint (HSBC), on the relationship
between residual state ownership and privatised firm performance. Furthermore, we use a
propensity score matching technique to quantify the marginal effects of the IGMB and HSBC
on the performance of privatised firms. According to our knowledge, we are the first who
employ these updated econometric techniques to assess the net impact of state ownership on
privatised firm performance in the Vietnamese context and further evaluate the moderating
roles of those two upon governmental mechanisms on the relationship between residual state
ownership and privatised firm financial performance.
The results from our semiparametric regression and SFA model indicate an inverted U
shaped relationship between level of state ownership and privatised firm performance. We
also uncover a positive moderating role for the IGMB on the relationship between residual
state ownership and privatised firm performance. Furthermore, HSBC is found to have a
direct positive effect on the performance of privatised firms. These results imply that state
ownership should not be considered merely a source of inefficiency. Rather, up to a moderate
level (less than 40%) it impacts positively on privatised firm performance via its “monitoring”
effect. However, when state ownership becomes dominant, its marginal impact is detrimental
to the performance of privatised firms via its “expropriation” effect. Also, the performance
of privatised firms could be enhanced by transferring the management of SOEs to a IGMB
which would liberate government ministries from governing SOEs, separate government
functions and business management of SOEs, and allow privatised firms to pursue purely
economic objectives and operate under a “market mechanism”. Furthermore, the
performance of privatised firms might be improved by HSBC due to providing an equal
treatment of state-owned and non-state-owned enterprises. Since in a fair competitive
environment privatised firms would have to transform themselves and become more efficient
or they will become replaced by private firms with higher efficiency. | en_US |
