Tác động của Cổ phần hóa đến Hiệu quả Doanh nghiệp: Nghiên cứu từ DNNN Việt Nam

VIETNAM NATIONAL UNIVERSITY HO CHI MINH CITY UNIVERSITY OF ECONOMICS AND LAW NGUYEN VAN TAN THE IMPACT OF EQUITIZATION ON FIRM PERFORMANCE: EVIDENCE FROM VIETNAMESE STATE-OWNED ENTERPRISES DOCTORAL DISSERTATION IN ECONOMICS Ho Chi Minh City, 2022 VIETNAM NATIONAL UNIVERSITY HO CHI MINH CITY UNIVERSITY OF ECONOMICS AND LAW NGUYEN VAN TAN THE IMPACT OF EQUITIZATION ON FIRM PERFORMANCE: EVIDENCE FROM VIETNAMESE STATE-OWNED ENTERPRISES Major: Finance – Banking Major code: 62340201 Reviewer 1: Assoc. Nguyen Anh Phong Reviewer 2: Assoc. Nguyen Hong Thang ADVISOR Assoc. Trinh Quoc Trung Double-blind peer review Reviewer 1: Prof.

Vo Xuan Vinh Reviewer 2: Dr. Nguyen Thanh Cuong Ho Chi Minh City, 2022 i DECLARATION I am Nguyen Van Tan, declare that this Ph. dissertation entitled “The impact of equitization on firm performance: Evidence from Vietnamese state-owned enterprises” is my own work under supervision from Assoc. Trinh Quoc Trung - University of Economics and Law, VNU-HCM, Ho Chi Minh City, Vietnam.

The dissertation contains no material that has been submitted previously, in whole or in part, for the award of any other academic degree or diploma. Student Nguyen Van Tan ii ACKNOWLEDGMENTS The author would like to express special thanks to Assoc. Trinh Quoc Trung - University of Economics and Law, VNU-HCM, Ho Chi Minh City, Vietnam, for his valuable advice to finish this dissertation. The author also would like to show sincere respect to the doctoral approval committee, leaders, and lecturers from the finance and banking faculty for their valuable feedback and generous support.

The dissertation cannot be finished without valuable advice and international privatization data from Prof. Megginson - the University of Oklahoma’s Michael F. Price College of Business and Prof. Jay Ritter - the University of Florida, Warrington College of Business.

iii CONTENTS DECLARATION. iii LIST OF ABBREVIATIONS. viii LIST OF TABLES. ix LIST OF FIGURES .2 Background of the research.1 General research objectives .2 Specific research objectives .5 Research object and research scope.2 Scope of the study .6 Research methodology and data .1 In the theoretical aspect .2 In the practical aspect .8 The research framework .9 Structure of the dissertation.

THEORIES AND EMPIRICAL STUDIES ON EQUITIZATION AND FIRM PERFORMANCE .1 Definitions of privatization/ equitization and firm performance .1 Definitions of state-owned enterprises .3 Listing related theories .1 The impact of privatization/equitization on firm performance of privatized/equitized state-owned enterprises compared with non-participating state- owned enterprises .2 The impact of equitization on firm performance of equitized state-owned enterprises compared with non-equitized state-owned enterprises by average state ownership rates after equitization .3 The impact of equitization on firm performance of equitized state-owned enterprises compared with non-equitized state-owned enterprises according to industry groups .4 Incentive policies for privatization programs and firm performance differences between listed and unlisted firms .5 Underpricing when firms go public .5 Summary of chapter 2. METHODOLOGY, DATA AND RESEARCH MODELS .1 The impact of equitization on firm performance of equitized state-owned enterprises compared with non-equitized state-owned enterprises .2 The impact of equitization on firm performance of equitized state-owned enterprises compared with non-equitized state-owned enterprises by average state ownership rates after equitization .3 The impact of equitization on firm performance of equitized state-owned enterprises compared with non-equitized state-owned enterprises according to industry groups .4 The impact of tax incentives on firm performance and firm performance differences between listed and unlisted firms after equitization .5 Underpricing of equitized state-owned enterprises through the initial public offering .1 Research model to examine the impact of equitization on firm performance changes of equitized state-owned enterprises compared with non-equitized state- owned enterprises .2 Research model to evaluate how tax incentives and listing affect firm performance changes .1 Variable description to examine the impact of equitization on firm performance changes of equitized state-owned enterprises compared with non- equitized state-owned enterprises .2 Variable description to evaluate how tax incentives and listing affect firm performance changes .3 Variable description for underpricing .4 Data collection and description .1 Average treatment effect through propensity score matching .2 Ordinary least square .3 t-Test for underpricing phenomenon .6 Summary of chapter 3 .1 Firm performance of equitized state-owned enterprises in the pre-post equitization periods.2 General firm performance of equitized state-owned enterprises .3 Firm performance changes of equitized state-owned enterprises .2 Quantitative research results .1 The impact of equitization on firm performance of equitized state-owned enterprises compared with non-equitized state-owned enterprises .2 The different impacts of equitization on firm performance of equitized state-owned enterprises compared with non-participating firms by different average state ownership rates after equitization .3 The different impacts of equitization on firm performance of equitized state-owned enterprises compared with non-participating firms according to industry groups .4 The impact of tax incentives on firm performance changes and firm performance changes between listed and unlisted firms .5 The underpricing phenomenon in the short run and long run .1 Hypothesis on the impact of equitization on firm performance of equitized SOEs compared with non-equitized state-owned enterprises (hypothesis 1) .2 Hypothesis on the impact of equitization on firm performance of equitized SOEs compared with non-equitized state-owned enterprises by average state ownership rates after equitization (hypothesis 2).3 Hypothesis on the impact of equitization on firm performance of equitized state-owned enterprises compared with non-equitized SOEs according to industry groups (hypothesis 3) .4 Hypothesis on the impact of tax incentives on firm performance and firm performance differences between listed and unlisted firms after equitization (hypothesis 4) .5 Underpricing hypothesis of equitized state-owned enterprises through the initial public offering (hypothesis 5) .5 Summary of chapter 4. CONCLUSIONS AND RECOMMENDATIONS .1 Equitization and firm performance of equitized state-owned enterprises compared with non-equitized state-owned enterprises .2 The state deregulation and control.3 The impact of equitization on firm performance changes according to industry groups .4 Incentive policies and listing encouragement .5 Underpricing of equitized state-owned enterprises through the initial public offering .3 Limitation of the study and suggestions for further research .4 Summary of chapter 5. 155 LIST OF PUBLICATIONS.

18 viii LIST OF ABBREVIATIONS Abbreviation Meaning ATE Average treatment effect DID Difference-in-difference EMPL Total number of employees GDP Gross domestic product HNX Hanoi Stock Exchange HOSE Hochiminh Stock Exchange KPIs Key Performance Indicator IPO Initial public offering LV Leverage MEBOs Management employee buyouts NIEFF Net income efficiency NPM New public management PSM Propensity score matching ROA Return on assets ROE Return on equity ROS Return on sales SAL Real sales SALEF Sales efficiency SEO Seasonal public offering SIE Share issue equitization SIP Share issue privatization SOEs State-owned enterprises SSC The state securities commissions of Vietnam TAS Total asset turnover VND Vietnam Dong VGSO General Statistics Office of Vietnam ix LIST OF TABLES Table 2.1 Comparison between private firms and state-owned enterprises .2 Comparison between privatization and equitization. Privatization and equitization methods .4 Comparision between empirical studies examining the impact of privatization on firm performances changes with and without considering non-participating firms 42 Table 3. Actual values of eight equitized SOEs after being audited for equitization pricing .2 Summary of research hypotheses. Variable summary and measurement for average treatment effect using propensity score matching.

Variable summary and measurement for multiple regression .5 Summary of data source according to five research gaps .6 Number of non-equitized and equitized state-owned enterprises. Frequency statistics of equitized state-owned enterprises. Descriptive statistics of firm performance changes for equitized state-owned enterprises. Frequency statistics of non-equitized state-owned enterprises.

Statistics on the number of enterprises conducting initial public offering by sector, firm size and financial crisis event. Descriptive statistics of firm performance measure changes. Descriptive statistics of underpricing. Firm performance changes of equitized state-owned enterprises.

Firm performance changes of equitized state-owned enterprises by firm size, listing status and tax incentives. Firm performance changes of equitized state-owned enterprises by industry groups. Firm performance changes of equitized state-owned enterprises by average state ownership after equitization. General average treatment effect with propensity score matching and difference-in-difference analysis.

Average treatment effect by firm size. Return on assets of operating firms based on firm size in Vietnam (%). Return on assets of operating firms based on firm type in Vietnam (%) 112 Table 4. Percentage of state ownership of equitized state-owned enterprises after four equitization years in Vietnam.

Return on assets of operating firms based on industry groups in Vietnam (%). Regression results in the impact of equitization on firm performance changes. Testing for underpricing in the short run. Testing for overpricing in the long run .1 Return on assets improvement of equitized state-owned enterprises compared with non-equitized state-owned enterprises based on firm size.2 Return on assets improvement of equitized state-owned enterprises compared with non-equitized state-owned enterprises based on average state ownership after equitization.3 Return on assets improvement of equitized state-owned enterprises compared with non-equitized state-owned enterprises based on industry groups.

142 xi LIST OF FIGURES Figure 1. The research framework. Adjustment to reduce the number of industries, sectors that the State holds 100% authorized capital or dominant shares. The profitability of equitized state-owned enterprises in the pre-post equitization windows.

Total asset turnover (TAS) of equitized state-owned enterprises in the pre- post equitization windows. The density of the short-run underpricing. Return on assets change of large-scale equitized state-owned enterprises according to average state ownership and industry groups. Return on assets change of equitized state-owned enterprises according to average state ownership, firm size and industry groups.

The number of equitized state-owned enterprises according to average state ownership and firm size. Return on assets change of equitized state-owned enterprises in the manufacturing and construction industry according to average state ownership and firm size. The number of equitized state-owned enterprises according to industry groups, firm size and tax incentives. The number of equitized state-owned enterprises according to industry groups, firm size and listing status.

Return on assets change of listed equitized state-owned enterprises according to average state ownership and firm size. The average value of the short-run underpricing measures. Fluctuation of the long-run underpricing measures. 153 xii ABSTRACT Privatization topics have attracted research interests from several researchers all over the world.

With inconsistent results due to different privatization policies and estimation methods, the study of privatization on firm performance has been voluminous, especially in transition economies. Based on equitization characteristics in Vietnam and five research gaps existing, the author has chosen the research topic to examine how equitization impacts firm performance in Vietnam. This dissertation has employed a combination of difference-in-difference, with-without comparison and regression methods to analyze how equitization impacts firm performance in Vietnam. Research results show that equitization only helps enterprises improve profitability if considering return on assets (ROA) compared with non-equitized enterprises in the same periods.

Also, equitization only helps firms improve profitability compared with non-participating firms (change in ROA) when firms are no longer under state control after equitization (average rate of state ownership after four years of equitization less than 50%). Tax incentive policy has no impact on profitability improvement (change in ROA) and operating efficiency change (change in total asset turnover). Finally, listing status has a positive impact on ROA improvement after equitization in Vietnam. This result shows that listed firms have greater ROA improvement than unlisted firms after equitization.

Besides, research results show that there is an underpricing phenomenon in the short run but overpricing in the long run. Based on research findings, the dissertation proposes some recommendations for equitized state-owned enterprises (SOEs), non-equitized enterprises, investors and the Vietnamese government in Vietnam. 1 Chapter 1 INTRODUCTION This chapter represents problem statements to explain reasons why the dissertation is necessary. Also, the chapter includes a background of the research, research gaps and introduction of the dissertation.1 Problem statements According to the Vietnamese Steering Committee for Enterprise Renovation and Development (2021), the Vietnamese Government conducted equitization through three phases, and the first phase took place from 1992 to 2000.

Although equitization has brought many benefits to boost economic development, equitization still has some limitations in Vietnam.