Luận án về cấu trúc sở hữu và hiệu suất doanh nghiệp tại Việt Nam

VIETNAM NATIONAL UNIVERSITY OF HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY NGUYỄN TIẾN THÔNG OWNERSHIP STRUCTURE, BOARD CHARACTERISTICS AND FIRM PERFORMANCE IN VIETNAM PHD THESIS HO CHI MINH CITY, 2019 VIETNAM NATIONAL UNIVERSITY OF HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY NGUYỄN TIẾN THÔNG OWNERSHIP STRUCTURE, BOARD CHARACTERISTICS AND FIRM PERFORMANCE IN VIETNAM Subject: Business Administration Code: 62340501 Independent Examiner 1: Associate Prof. Vương Đức Hoàng Quân Independent Examiner 2: Associate Prof. Đỗ Bá Khang Examiner 1: Associate Prof. Võ Thị Quý Examiner 2: Associate Prof.

Nguyễn Minh Hà Examiner 3: Associate Prof. Nguyễn Minh Kiều ADVISORS 1. Nguyễn Thu Hiền 2. Piman Limpaphayom STATUTORY DECLARATION I declare that I have developed and written the enclosed Dissertation completely by myself, and have not used sources or means without declaration in the text.

Any thoughts from others or literal quotations are clearly marked. The Dissertation was not used in the same or in a similar version to achieve an academic grading or is being published elsewhere. Author, Signature Nguyễn Tiến Thông i ABSTRACT Ownership structure, which specifies who are the owners of the firm, is crucial to corporate governance as it explains sources of agency conflicts. Roles and impacts of different corporate owners on corporate performance and governance have been studied worldwide, but not as popular for the role of State-Owned Holding Company (SOH) as a model of state capital investment agency.

This study examines the relationship of ownership of SOH in the listed companies with state capital in Vietnam and the performance of these firms. The result shows that companies with SOH ownership, or SOH-linked companies (SLCs), deliver superior returns and enjoy higher valuations than GLCs and non-GLCs as a result of higher profitability, and lower leverage ratio. The evidence shows that when SOH holds a dominant ownership, it exercises positive control on firms, which results in better market performance. Further analysis shows that SLCs hold more cash and the shareholders appreciate the cash hold by the SLCs, robust to the firms’ characteristics.

Without evidence that SLCs have special privileges and lower business risks, the better shareholder value of cash in SLCs is revealed to come from better corporate governance. This study contributes to the literature of ownership structure and corporate governance and provides an evidence for SOH as a positive ownership and monitoring mechanism in improving corporate governance and firm performance in companies with State-owned capital in Vietnam. The study also looks at the impacts of other owners in listed companies, such as family owners and foreign owners, board characteristics, and board independence on firm performance and yields evidence for various impacts of internal governance mechanisms on firm performance. ii ACKNOWLEDMENTS This thesis is a dedicated present to my dear parents to thank for their invisible contributions and also the wishes they have expected on me.

The Buddha said “in the end, only three things matter: how much you loved, how gentle you lived, and how gratefully you let go things not meant for you”. I would like to thank my parents for their love, their mercy and their sacrifices helped me grow up. I am grateful to my advisors, Dr. Nguyen Thu Hien and Assoc Prof.

Piman Limpaphayom for their thoughtful guidance and insightful comments throughout my working. Corporate Governance is a new research direction and their knowledge and experience are useful resources for my first step in this field. I would like to say thank to other teachers of University of Technology, The School of Industrial Management, my colleagues and my friends with their supports and encouragement during my efforts for this study. Last but not least, I would like to express my sincere thanks to Prof.Nguyễn Trọng Hoài Associate Prof.Võ Thị Quý Associate Prof.Nguyễn Minh Hà Associate Prof.

Nguyễn Minh Kiều Associate Prof. Vương Đức Hoàng Quân Associate Prof.Dương Như Hùng for their precious comments to help improve my work. iii TABLE OF CONTENTS LIST OF FIGURES. vii LIST OF TABLES.

20 CHAPTER 2 STATE-OWNED HOLDING COMPANY .1 SOE and SOH .2 State-Owned Enterprises .1 Concept of SOE .2 SOE in Literature .3 SOEs & Privatizations in other countries .4 SOEs and Equitization in Vietnam .3 State-Owned Holding Company, a new approach .1 SOH: Managerial Form .3 SOH: Around the world .4 Temasek Holdings, a successful SOH .5 Khazanah Nasional Berhad, SOH of Malaysia .6 SCIC, SOH of Vietnam. 40 CHAPTER 3 LITERATURE REVIEW .1 Agency Theory and Agency Problem .2 State Ownership Agency Problem .3 Remedies to Agency Problem .4 Model of SOH blockholder with profitability objective as remedy to State ownership agency problem .5 Other Ownership Structure & Board Characteristics as Remedies to Agency Problem .6 Ownership Structure, Cash Holdings and Firm Value .2 Previous Studies on Ownership Structure, Board Characteristics and Firm Performance .1 Ownership Structure and Board Characteristics Studies around the World 54 3.2 Ownership Structure and Board Characteristics Studies in Literature .3 Research Hypothesis Development .1 Impacts of SOH ownership on Firm Performance .2 Role of Ownership Structure on Firm Performance through impacts of Cash Holdings .2 Research Variables for Impacts of Ownership Structure and Board Characteristics on Firm Performance .3 Research Variables for Impacts of Ownership Structure on Firm Performance through Cash Holdings .1 Pooled Cross Section (POLS).6 Feasible Generalized Least Square (FGLS) .7 Panel-Corrected Standard Error (PCSE) .8 Breusch-Pagan Lagrange Multiplier (LM) Test and Hausman Test .9 Endogeneity of Ownership Structure .1 Description of dataset.3 Correlation Analysis of Variables .4 Performance Comparisons between SLCs, GLCs and non-SLCs .1 Impacts of Ownership Structure, Board Characteristics on Firm Performance .2 Impacts of Ownership Structure on Firm Performance through Interaction Variables .3 Discussions on SLCs’ Performance .4 Impacts of Ownership Structure on Corporate Cash Holdings .5 Impacts of Ownership Structure, Cash Holdings on Firm Value .8 Summary of Chapter .2 Summary of Main Findings from Samples .1 Implications for Literature based on findings from study’s samples .2 Implications for Policy Makers based on findings from study’s samples .4 Limitations and future research. 141 LIST OF PUBLICATIONS. SLCs and GLCs Benchmarking on Performance Ratios, Privileges and Business Risk.

Value of Cash Holidings Regressions. 177 vi LIST OF FIGURES Figure 3.1 Agency conflicts and corporate governance.3 Vietnamese Companies by Categories.2 Direct Relationship Model with Variables. 72 vii LIST OF TABLES Table 2.1 Differences in Governance Between Private and SOEs Sectors .2 Summary of SOEs related topics on Financial Times Top 45 Journals .3 SOH in two-tiered principal–agent relationship .4 Type of features of SOHs .5 SOHs in Countries .6 Comparison between Temasek Holdings and SCIC .7 Comparison between SCIC and State capital companies and GLCs .8 SCIC Main Functions .9 SCIC as a Shadow Investor .1 Summary of Key Studies on the Relationship between Ownership Structure and Firm Performance .2 Previous Studies of Ownership Structure, Board Characteristics in Vietnamese Market .1 Performance Measurements for Comparisons Analysis .2 Hypotheses for IGMs on Firm Performance .3 Hypotheses for Impacts on Cash Holdings .4 Hypotheses for Impacts on Shareholders’ Value of Cash Holdings.5 Independent Variables for Impacts of Ownership Structure and Board Characteristics on Firm Performance .6 Performance Measurements for Impacts of Ownership Structure and Board Characteristics .7 Control Variables for Impacts of Ownership Structure and Board Characteristics on Firm Performance .9 Variables and Definitions for Cash Holdings Model .10 Variables and Definitions for Level of Excess Cash Model.11 Variables and Definitions for Change of Excess Cash Model .2 Descriptive Statistics by Industries .3 Independent Variables Correlation Matrix .8 Tests for Heteroscedasticity of Model 1A .9 Test for Autocorrelation for Model 1A .10 Impacts of Ownership Structure and Board Characteristics on Firm Performance .11 Tests for Heteroscedasticity for Model 2A .12 Impacts of Ownership Structure on Firm Performance through Interaction Variables .13 Tests for Heteroscedasticity for Model 3A .14 Impacts of Ownership Structure on Cash Holdings .16 Impacts of Ownership Structure on Value of Cash using Excess Return Regressions (Annex 2) .12 Robustness Check by Sub-periods Regressions of Ownership Structure and Board Characteristics .13 Robustness Check by Industry-Adjusted-Performance Regressions of Ownership Structure and Board Characteristics .14 Impacts of Ownership Structure and Board Characteristics on Firm Performance by IV .15 Impacts of ownership structure and board characteristics on Firm Performance by Lagged Ownership. 125 ix ABBREVIATIONS CG Corporate Governance BOD Board of Directors FE Fixed Effects FGLS Feasible Generalized Least Square GLC Government-Linked Company.

In this study, GLCs means government linked companies that do not have SCIC’s ownership. ICB Industry Classification Benchmark IGM Internal Governance Mechanism LM Lagrange Multiplier OECD Organization for Economic Co-operation and Development OLS Ordinary Least Squares SB Supervisory Board SCIC State Capital Investment Corporation SOE State-Owned Enterprise SOH State-Owned Holding Company SLC SOH Linked Company RE Random Effects UK United Kingdom US United States of America x CHAPTER 1 INTRODUCTION This chapter introduces the thesis, its rationales, research gaps, objectives, significance, research scope and structure of the thesis.1 Overview The agency theory has illustrate that the separation between ownership and control in companies creates a better way to raise capital from the economy to expand business operations but on the other hand is the sources of conflicts of interests between shareholders and management. A good governance mechanism would alleviate agency problem and brings a positive impact on firm performance and value (Denis, 2001). Being an important governance mechanism, ownership structure of a firms is one of the principal instruments of corporate governance (La Porta et al., 1999; Hu and Izumida, 2008; He at al., 2012; Aguilera & Crespi-Caldera, 2016; Abdallah & Ismail, 2017; Panda & Leepsa, 2017; Loch et al., 2018; Li et al.

Beside other influential owners, such as families, institutional investors, a country’s state is a more special one. Firms with state capital have serious agency problem (Peng et al., 2016; Chen et al., 2018) when they pursue various objectives beside profitability. In its operations, they may be affected by political interference and be influenced by social objectives, all of which cost its professionalism and make it ineffective and inconsistent in strategies. Besides, under weak governance control, they also operate with low transparency and accountability (Wong, 2004; Kamal, 2010; Lin, 2012; Chen, 2013; Peng et al., 2016; Nurgozhayeva, 2017; Kim & Chung, 2018).

As a result, countries around the world look for a model to mitigate the agency problem in firms with state capital. Privatization was widely accepted as a solution to improve performance of state capital companies in the last decades (Bortolotti et al. However, the governments still retain large ownership proportion in the privatized firms (Bortolotti & Faccio, 2008). Agency problem in these firms has not been clearly resolved (Wang & Judge, 2012).

11 There is a need to form an intermediary agent that is pursuing foremost profitability objective, and is exempt from other conflicting objectives – a State Owned Holding company (SOH company). SOH is an intermediary agent that acts like a direct investment holding arm of countries’ governments (Sam, 2008; Kim & Chung, 2018). SOH, above all its mandates, is a strategic investor with profit maximization orientation (Kuznetsov & Murav’ev, 2001; Sam, 2010; Kim & Chung, 2018). SOH, first of all, will act a role similar to an institutional investor and theoretically will have stronger incentives to maximize firms’ value.

As a result, agency problem due to conflict of interests could be overcome (Sam, 2013). In addition, beside pursuing single objective, SOH is accountable for its performance and under a stronger monitoring mechanism. As a result, it is expected that SOH also implement better governance mechanisms in its invested companies than other state own representative agencies. Acting as an institutional investor with large enough ownership, SOH can use their rights to place pressures on managers in improving corporate governance, transparency, which lead to lower agency problem (Sam, 2013).

All of the above make SOH a potential mechanism to improve quality of corporate governance and firm performance. Several countries have built such models.