MINISTRY OF EDUCATION AND TRAINING THE STATE BANK OF VIETNAM HO CHI MINH CITY UNIVERSITY OF BANKING TRAN THI PHUONG UYEN THE IMPACT OF OWNERSHIP STRUCTURE ON THE VALUE OF NON – FINANCIAL ENTERPRISES L.
INTRODUCTION
MOTIVATION OF RESEARCH
In 2021, the Vietnamese stock market demonstrated strong growth, signaling growing market attraction, a view echoed by the Deputy General Director of the Hanoi Stock Exchange (Ministry of Finance, 2022) The number of listed companies continued to rise, expanding ownership structure diversity and complexity Vietnam's WTO membership since 2007 has fostered an open and integrated economy, where organizational and foreign ownership are increasingly recognized as playing important roles alongside traditional domestic ownership forms such as state ownership and private ownership These dynamics are supported by studies from Vo X.V (2020) and Nguyen D.T.
(2020) consider the effect of ownership structure on firm value, but these studies show inconsistent results; due to that point, the connection between ownership structure and corporate value is the highest consideration for managers, investors, and the Government In any terms of ownership, the main purpose is to maximize business value; however, different forms of ownership such as different strengths and weaknesses, leading to different ways that affect the firm's value as the size of firm, reputation, management capacity, etc Factors affecting the value of enterprises such as the size of enterprises, business position, management capacity, tax policies of the government, and so on
Across the globe and in Vietnam, numerous studies explore the relationship between ownership structure and corporate value, yet results often diverge due to differences in government governance, policy frameworks, and corporate regulations To address these inconsistencies, this study presents the thesis "The Impact of Ownership Structure on the Value of Non-Financial Enterprises Listed on the Ho Chi Minh City Stock Exchange," examining how ownership patterns influence firm value in Vietnam's stock market Based on the findings, it proposes practical management and governance measures aimed at maximizing enterprise value and profitability for non-financial listed firms, while promoting more stable and sustainable business operations.
GAP OF RESEARCH
Ownership structure is a central facet of the internal governance mechanism, significantly affecting a company’s value by shaping how operations are controlled to unlock shareholder value Despite extensive research, findings on the impact of ownership structure for non-financial firms listed on HOSE remain inconsistent There is a clear need for more empirical studies to examine and harmonize how ownership arrangements influence firm value across diverse market contexts, including not only developed economies but also frontier markets in transition toward developing ones.
Given that each country has a distinct economic environment and political institutions, the resulting business system exhibits country-specific characteristics Therefore, it is inappropriate to directly transplant studies on the relationship between ownership structure and firm value from other contexts into Vietnam This highlights the need for in-depth, Vietnam-focused research that examines ownership structure from multiple angles—state ownership characteristics, foreign ownership characteristics, and concentration of major shareholders—and assesses how these features interact with control variables under different measures of business value to determine their impact on firm value.
Research on the impact of ownership structure on firm value is relatively scarce, especially in developing economies In Vietnam, enterprises have made significant progress and value creation for listed companies is increasingly prioritized; however, endogenous factors such as ownership structure have not been adequately considered There are few studies that examine state ownership, foreign ownership, and the presence of major shareholders within the same framework to compare how these ownership characteristics influence the value of non-financial firms listed on the Ho Chi Minh City Stock Exchange (HOSE).
Many studies on non-financial enterprises in Vietnam were conducted over a narrow research period, making their conclusions less applicable to current practice This study is urgent and meaningful, aiming to supplement empirical evidence and synthesize a coherent theoretical basis to argue that ownership structure significantly influences the value of non-financial firms The financial statements are listed on HOSE, providing the data backbone for this analysis.
2013 to 2020, a period that shows many changes in the Vietnamese economy, as well as contributes to evaluating the effectiveness of government policies issued such as Decision
No 242 / QD-TTg restructuring the stock market and insurance market.
OBJECTIVES OF RESEARCH
This study identifies the impact of ownership structure on the value of non-financial enterprises listed on the Ho Chi Minh City Stock Exchange (HOSE) and provides evidence-based management implications to improve operational efficiency and market positioning By analyzing ownership concentration, block holdings, and governance practices, the research quantifies how ownership design affects firm value and overall performance The findings offer actionable recommendations for managers and policymakers to optimize ownership configurations, enhance value creation, and strengthen competitive standing in Vietnam’s equity market.
Evaluate the impact of state ownership on the value of non-financial enterprises listed on the stock exchange of Ho Chi Minh City
Evaluate the impact of foreign ownership on the value of non-financial enterprises listed on the stock exchange of Ho Chi Minh City
Evaluate the existence of major shareholder affects on the value of non-financial enterprises listed on the stock exchange of Ho Chi Minh City
This thesis investigates how ownership structure influences the value of non-financial enterprises listed on the Ho Chi Minh City Stock Exchange (HOSE) It seeks to answer the central research question: To what extent does ownership structure affect the market value of these non-financial firms on HOSE? By examining ownership concentration, block holdings, and the mix of state, institutional, and insider shareholders, the study aims to uncover the link between governance structure and firm value The results will contribute to corporate governance practices and investment decision-making in Vietnam's stock market, highlighting the critical role of ownership structure in determining firm value on HOSE.
For more specific this thesis „s question, there are have some small questions that have been answered:
This study investigates whether a correlation exists between state ownership and enterprise value, and, if so, quantifies the extent to which government ownership affects the value of non-financial enterprises listed on the Stock Exchange of Ho Chi Minh City (HOSE) in Vietnam.
Is there a correlation between foreign ownership and enterprise value? This study investigates whether foreign ownership is related to the value of non-financial enterprises listed on the Stock Exchange of Ho Chi Minh City (HOSE) and, if so, gauges the extent of its impact Focusing on non-financial firms trading on HOSE, the research analyzes how foreign ownership stakes influence enterprise value, employing measures such as market value to book value or Tobin's Q while controlling for size, leverage, profitability, growth, and other firm characteristics The objective is to quantify the direction and strength of foreign ownership effects on enterprise value and to extract implications for investors and policymakers in Vietnam's equity market.
This study investigates whether the existence of major shareholders is correlated with enterprise value and, if so, to what extent controlling ownership by major shareholders affects the value of non-financial enterprises listed on the Ho Chi Minh City Stock Exchange (HOSE) It examines the relationship between ownership concentration and firm value among non-financial listed companies, aiming to quantify the impact of major shareholders on market valuation The findings provide actionable insights for investors, managers, and policymakers concerned with corporate governance and stock performance on HOSE.
SUBJECT AND SCOPE OF RESEARCH
The subject of thesis is the impact of the ownership structure on the value of non- financial enterprises listed on the Stock Exchange of Ho Chi Minh City
Scope of the study: The analysis uses data from 200 non-financial enterprises listed on the Ho Chi Minh City Stock Exchange To ensure comparability and reduce biases arising from differences in financial statements, risks in governance decisions, and other factors, financial, insurance, and real estate companies are excluded from the sample.
- Scope of time: Study period within 8 years from 2013 to 2020
A quantitative method was employed to measure the impact of ownership structure on the enterprise's value The quantitative study drew a sample of 200 non-financial enterprises and collected 1,600 valid questionnaires, creating a robust dataset to analyze how ownership structure influences enterprise value.
Sample collection method: This study relies on secondary data drawn from audited annual financial statements, management reports, and annual corporate reports The sample is refined by excluding enterprises that do not publish information or provide incomplete information, and by removing entities involved in mergers and acquisitions (M&A) to ensure data quality and comparability across firms.
Input data were processed using Microsoft Excel 2016 and STATA 14 to indicate the impact of ownership structure on the enterprise value of non-financial companies listed on the Ho Chi Minh City Stock Exchange The approach combines data organization in Excel 2016 with econometric analysis in STATA 14 to quantify how ownership configuration influences firm value The study focuses on non-financial listed firms on this market, examining ownership concentration, dispersion, and controlling interests as determinants of enterprise value The findings provide evidence on the effect of ownership structure on enterprise value, offering actionable insights for investors, managers, and policymakers in Vietnam’s stock market.
CONTRIBUTIONS OF RESEARCH
From a scientific significance perspective, the thesis systematizes the theoretical foundations and empirical findings from both global and Vietnamese research on ownership structure and corporate value, enriching the theoretical framework and providing clearer insights into how ownership structure affects firm value across different contexts.
This article provides empirical findings on the impact of ownership structure on the value of non-financial enterprises listed on HOSE during 2013–2020, analyzing how ownership configuration—such as concentration and dispersion—affects firm value in the Vietnamese market Based on the study results, it offers actionable measures and recommendations to help business executives allocate ownership more efficiently, strengthen governance, and pursue profit maximization while avoiding potentially negative impacts on performance and shareholder value.
STRUCTURE OF RESEARCH
Chapter X explains the essential rationale for pursuing a thesis, clarifying the necessity and relevance of the study It presents the aims and research questions that guide the investigation, defines the subject and scope, and outlines the delimitation of the work It also describes the research method, detailing the approach and procedures derived from a review of previous research Finally, it articulates the expected contributions of the thesis to the field, showing how the findings will advance knowledge and practice.
LITERATURE REVIEW
OWNERSHIP STRUCTURE AND ENTERPRISE VALUE
The concept of ownership structure 2.1.1.
2.1.1.1 The definition of ownership structure
In their book "The Modern Corporation and Private Property," Berle and Means
Berle and Means (1932) were among the first researchers to lay the groundwork for the concept of ownership structure Jensen and Meckling (1976) defined ownership structure as the distribution of a firm’s capital between inside owners who direct management and external investors who do not participate in day-to-day oversight As science and technology advance production, firms’ capital needs have grown beyond what any single individual can provide, leading to the emergence of many business owners—shareholders—who supply the necessary funding.
According to Duong T.D (2021), the ownership structure reflects how shareholders’ ownership interests relate to other components of equity, thereby shaping the relationships between ownership and the company’s production and operating activities and the economic benefits these equities generate Consequently, a higher shareholding percentage signifies greater accountability for directing the enterprise’s operations and management by the shareholder or group of shareholders This governance framework highlights how ownership, control, and value creation are interlinked through equity stakes.
Ownership structure refers to the allocation of equity in proportion to each owner's stake, i.e., the shareholders' holdings This structure significantly impacts how organizations and businesses operate because it shapes managerial decision-making.
Ownership structure is a critical determinant of a company’s operation because it shapes managers' decision-making, so it must be understood from the managers’ perspective, who represent ownership within the enterprise (Altunbas, Carbo, Gardener, and Molyneux, 2007) The ownership structure also acts as a core internal governance mechanism, with a direct impact on the enterprise’s value (Amor and Accounting).
Classification of ownership structure based on the feature of shareholders
Enterprise ownership structures are categorized into private ownership, state ownership, foreign ownership, and mixed ownership, as outlined in classic works by Berle and Means (1932), La Porta et al (1999), and Larner (1966) Although mixed ownership combines state and private elements, this study excludes this category to maintain clear and consistent classifications of ownership types.
Numerous studies show that many enterprises feature majority or substantial state ownership, surpassing the ownership levels of other state‑owned enterprises (Morck, Shleifer, and Vishny, 1988) As a result, the government holds a large percentage of stock, providing it with significant control and influence over these enterprises and enabling it to steer business objectives in a specific direction.
To clearly assess the positive or negative role of state ownership structures, many prior studies have compared state ownership with private ownership, thereby highlighting the impact of ownership form on performance and governance Seminal contributions by Laffont and Tirole (1993) and by Sappington and Stiglitz illuminate how different ownership regimes influence incentives, efficiency, and outcomes, reinforcing the central debate on the benefits and costs of state involvement in enterprises.
Research from 1987 suggests that private firms may be inefficient because they focus solely on profits, while state-owned enterprises can exercise greater control over decision-making within an open political framework A substantial body of subsequent studies also supports the state ownership model, with Grossman and Hart (1980) among the notable proponents.
Shleifer (1998) argues that private ownership should take precedence over state ownership because private ownership provides more cost-effective incentives for innovation and improvement Several studies have found that state-owned enterprises do not serve the public better (Grossman and Krueger, 1991) and are often extremely inefficient (Boycko, Shleifer and Vishny, 1996; Dewenter and Malatesta, ).
Public officials are often influenced by political interests, which can conflict with the goal of improving social welfare In their 1997 study, Dewenter and Malatesta show that shares of state-owned enterprises are offered to the public at substantially lower prices than those of comparable private firms, implying that government actions may prioritize political objectives over maximizing social welfare.
State-owned enterprises (SOEs) are a distinct group because they pursue political and social goals and are often compensated or subsidized by the state, a view supported by Shleifer and Vishny (1997) Studies of ownership structure across countries reveal divergent results, with developing economies showing particular patterns where state ownership remains prevalent, including Eastern Europe, China, and Vietnam These countries exhibit unique peculiarities in their SOE governance and ownership structures, especially after transitioning from centralized economies, a phenomenon highlighted by Hue and Lam (2017) Consequently, state ownership in these contexts tends to remain high following economic reforms, reflecting ongoing government involvement in corporate control and public policy objectives.
Privately owned enterprises are controlled by individuals or private entities rather than the state or state-owned entities In emerging markets, these firms commonly arise after the privatization of state-owned enterprises following crises, a process designed to reduce state ownership in key sectors and to reflect the financial weakness of SOEs (Andrews, 2005) The success of privatization depends on resolving internal corporate governance issues after privatization Privatization lowers the government drag that weighs on SOEs; however, if the government retains some equity, firm performance tends to deteriorate (Bonin and Wachtel, 1999) A large body of evidence suggests private ownership leads to higher efficiency than state ownership because owners implement tighter governance and better management, solving the owner–representative problem Private ownership tightens budget constraints, pressuring managers to improve performance to satisfy current shareholders and attract new investors, while shareholders exercise stricter governance to ensure the efficiency of their investment (Clarke, Cull and Shirley, 2005).
An enterprise is typically considered foreign-owned when foreign organizations hold 100% equity, or when foreign capital establishes a subsidiary or branch in a country outside the home market—either as a wholly owned entity or as a joint venture (Weill, 2003) Multinational companies investing to set up subsidiaries or branches abroad thus create foreign ownership structures within the host economy Foreign enterprises share similar cash-flow incentives and regulatory characteristics with domestic firms, but they often feature more multi-level management, with senior executives drawn from other countries They coexist with domestic enterprises, contributing to a healthier, more developed business system through competition for products and services This thesis, however, concentrates on measuring the rates of state ownership structure and foreign ownership structure within enterprises.
Classification of ownership structure according to the degree of concentration
Many studies on ownership structure focus on the dispersion of shareholders’ capital and the power exercised by managers within the enterprise Consequently, ownership structures are categorized as centralized or distributed, reflecting different patterns of ownership concentration and managerial influence This classification, introduced by Fazlzadeh, Hendi, and Mahboubi (2011), provides a framework for analyzing how ownership dispersion and control shape corporate governance and firm performance.
A centralized ownership structure concentrates both ownership and control of the company in one or a few individuals, families, or management In contrast, a distributed ownership structure involves many shareholders, each owning a portion of the business, with the board of directors overseeing and directing company operations.
METHODOLOGY OF THESIS
RESEARCH PROCESS
This study builds on the theoretical framework and the body of empirical studies discussed in earlier chapters to establish a solid background and a coherent argumentative basis for the research, while also detailing the implementation of the research steps Specifically, the following research process clarifies how theory and evidence guide the study design, data collection, and analysis, ensuring a rigorous and transparent investigation By articulating the research problem, aligning objectives with methods, and outlining the step-by-step procedures, the article presents a cohesive pathway from concept to evidence-based conclusions.
Step 1: Establish the research hypothesis
Step 3: Collect and analyze data to receive the research sample
Step 4: Describe the research method
Step 5: Report the obtained results
Step 6 Explain and discuss the research results received.
RESEARCH HYPOTHESIS
Impact of state ownership to the value of non-financial enterprises 3.2.1.
Research by Choi et al (2010) shows that high levels of state ownership in firms are associated with information asymmetry, as these firms often withhold comprehensive information from investors Once listed on the stock exchange, they must meet formal information-disclosure requirements and provide adequate, transparent disclosures similar to other listed companies This reduction in information asymmetry tends to boost market confidence and can lead to higher valuation of these state-owned enterprises.
State and other shareholders in joint-stock companies may have conflicting interests, but it remains essential to ensure efficient operations that create higher value State-owned shares often enjoy preferential advantages—policy incentives, more assets, and intangible benefits such as relationships with banks and large partners—which in turn makes it easier to access external capital and lowers costs, facilitating smoother business activities Based on these arguments, the author formulates the research hypothesis.
Hypothesis 1: State ownership has a positive impact on firm value
Impact of foreign ownership to the value of non-financial enterprises 3.2.2.
Through the research for other countries in the world, especially developing countries such as Turkey (Ali O G and Asli Aybars, 2010), Indonesia (Alnold J & B.S Javorcik,
In 2009, regarding the Vietnamese market, the author expected foreign investment to contribute to the development of business activities A high level of foreign ownership was anticipated to enhance management standards, broaden access to modern technology, and drive appropriate improvements in business operation processes.
Foreign investors often bring expert knowledge and skills that help businesses manage and control operations more effectively According to Vo X.V (2014), they allocate most of their capital to large companies and prefer firms with low leverage They also tend to avoid companies with dominant shareholders.
Vo X.V (2014) also comes to the conclusion that foreign investors are necessary for the Vietnamese market
Inheriting the previous studies, author also gives the following research hypothesis in this thesis:
Hypothesis 2: Foreign ownership has positive impact on firm value
Impact of the existence of major shareholders to the value of non-financial 3.2.3. enterprises
According to Nguyen D.T (2020), major shareholder ownership formed by a group of investors with a large stake creates linkages within the dominant group to exercise general control, while erecting barriers that limit other shareholders’ participation in management A group of shareholders can generate more problems than a single investor, as conflicts over advantages and corporate strategy may trigger the "many teachers, many ghosts" phenomenon When one investor holds disproportionate voting power, smaller investors may bear higher costs of concentration, reducing stock liquidity and the informativeness of prices In Vietnamese enterprises, the number of large shareholders (holding more than 5% of share capital) is relatively small, regardless of whether the investors are institutional or individual, yet the largest shareholder’s stake tends to be comparatively large relative to the rest.
According to studies by Al-Najjar, B., and Kilincarslan, E (2016); Aluchna, M., and Kaminski, B (2017); Kao, MF, Hodgkinson, L., and Jaafar, A (2019); and Vo X.V (2020), the existence of major shareholders is treated as a dummy variable (0 or 1) and is defined as a shareholder who directly or indirectly owns 5% or more of the voting shares of the issuing company The research suggests that when voting power is concentrated in a few large shareholders, it can improve the company's operations by reducing costs from internal conflicts; however, the distribution of power is also predicted to adversely affect firm performance.
Hypothesis 3: The existence of a major shareholder has positive impact on firm value.
RESEARCH MODEL
This study uses a quantitative approach to examine how ownership structure affects firm value, while also considering firm efficiency, influence, and corporate value Synthesizing and building on prior research, the model includes variables such as firm size (FIRMSIZE), financial leverage (LEV), growth rate (GROWTH), and firm age (FIRMAGE), together with return on assets (ROA) and return on equity (ROE) Based on the original model proposed by Vo Xuan Vinh (2014) and under Vietnam’s market conditions, the study specifies the main research model to assess the impact of ownership structure on firm value.
VALUE it = α + β1OWN it + β3SIZE it + β4DEBT it + β2INVEST it + β5SALES it + ε it expresses firm value as a function of ownership, size, debt, investment, and sales Building on Vo X.V (2014), the author employs a panel data model and selects an appropriate regression specification to examine the impact of ownership structure on the value of non-financial enterprises listed on HOSE The thesis presents three corresponding models to address this research question.
Model 1: TOBINSQ = α + β1GOV + β2FIRMSIZE + β3LEV + β4FIRMAGE + β 5 GROWHT + β 6 ROA + β 7 ROE + ε it
Model 2: TOBINSQ = α + β 1 FORG + β 2 FIRMSIZE + β 3 LEV + β 4 FIRMAGE + β5GROWHT + β6ROA + β7ROE + ε it
Model 3: TOBINSQ = α + β 1 BLOCK + β 2 FIRMSIZE + β 3 LEV + β 4 FIRMAGE + β5GROWHT + β6ROA + β7ROE + ε it is
TOBINSQ serves as the firm’s value proxy, with α denoting the intercept term for each research unit Ownership structure is captured by GOV, FORG, and BLOCK, while the model includes control variables—FIRMSIZE, LEV, FIRMAGE, GROWTH, ROA, and ROE—to account for firm characteristics The residual ε_it represents the observation-specific error for unit i at time t.
Dependent variable in this model is enterprises value that is measured by Tobin‟s Q coefficient based on the research of Vo X.V (2014), Al-Najjar, B., and Kilincarslan, E
(2016), Aluchna, M., and Kaminski, B (2017) and Kao, MF, Hodgkinson, L., and Jaafar, A
(2019) on the impact of ownership structure on enterprise‟s value Tobin‟s Q coefficient is calculated by the following formula:
Previous studies typically use Tobin's Q as the dependent variable to study how ownership structure affects firm value Across empirical studies worldwide, the market value of debt is the preferred measure in formula (1) rather than the book value of debt However, the Vietnam market study diverges from this standard by substituting the book value of debt for the market value of debt when calculating debt in formula (1) In other words, the Vietnamese author's approach uses the book value of debt in debt valuation during buy/sell transactions, rather than applying the market value of debt as is common in global empirical research.
The structure of state ownership (GOV)
This study assesses the state ownership structure by examining the ratio of shares held by the state or its representative to the total shares issued, in line with the methodological frameworks of Al-Najjar, B., and Kilincarslan, E (2016); Aluchna, M., and Kaminski, B (2017); and Kao, MF, Hodgkinson, L., and Jaafar, A (2019) Prior research shows mixed or even conflicting findings on the impact of state ownership on firm value, yet enterprises with substantial state capital have risen to dominate the national economy.
The structure of foreign ownership (FORG)
Studies by Vinh VX (2020), Al-Najjar B and Kilincarslan E (2016), Aluchna M and Kaminski B (2017), and Kao MF, Hodgkinson L, and Jaafar A (2019) indicate that the foreign ownership structure is measured by the ratio of foreign ownership to the total number of shares issued by the enterprise Theory suggests that the presence of a foreign element in a business brings significant benefits, particularly in management capability, increased accessibility, and global development As a result, foreign ownership in a company has the potential to increase its value.
The existence of major shareholders (BLOCK)
BLOCK is a dummy variable that indicates whether a company has major shareholders It is equal to 1 when a firm has a major shareholder and 0 when it does not A major shareholder is defined as a shareholder who directly or indirectly owns 5% or more of the voting shares of the issuing organization This factor follows prior research by Al-Najjar and Kilincarslan (2016) and Aluchna and Kaminski.
Studies from 2017, Kao MF, Hodgkinson L., and Jaafar A (2019), and Vinh VX (2020) argue that the presence of a major shareholder can affect enterprise value by authorizing or appointing members of the board of directors and other related committees, highlighting how corporate governance driven by controlling shareholders influences firm value.
Firm size (FIRMSIZE) has been used as a control variable to measure the impact of total assets on enterprise value in studies by Vinh (2014), Alzoubi (2016), Al-Najjar & Kilincarslan (2016), Bajagai et al (2019), and Kao, Hodgkinson, & Jaafar (2019) These studies report inconsistent or even conflicting results on how firm size affects enterprise value, yet they collectively indicate that firm size influences financial structure and, consequently, enterprise value In practice, larger firms tend to have greater access to external finance and external equity, shaping the corporate capital structure, while firm size also affects financial costs Information asymmetry between SMEs and large firms means small and medium-sized enterprises (SMEs) often face higher outside financing costs due to weaker accounting information, whereas larger firms generally enjoy lower financing costs At the same time, a smaller business can strengthen its brand and product quality by enforcing high standards, and management can more easily supervise and maintain quality within a compact infrastructure, which can lead to higher-quality output and reduced risk.
Revenue growth rate (GROWTH): Alzoubi, ESS (2016) and Kao, MF.,
Hodgkinson and Jaafar (2019) found that revenue growth positively affects firm value Revenue growth signals efficient operations and attracts external investment, enabling faster growth and higher firm value However, growth-oriented firms are often evaluated for risk and profit potential, so growth can mitigate potential negative effects on the quality of firm value.
Corporate leverage ratio (LEV): Through the studies of Alzoubi, E S S (2016); Bajagai, R K., Keshari, R K., Bhetwal, P., Sah, R S., and Jha, R N (2019); Kao, M F.,
According to Hodgkinson and Jaafar (2019), financial leverage directly affects corporate value because debt impacts profit and overall business worth The effect depends on the purpose and manner in which leverage is used, so it can yield positive or negative outcomes When leveraged capital is managed effectively, it provides substantial benefits and can significantly increase a company’s value; if misused, it can diminish value.
The age of company (FIRMAGE): According to the research of the author Kao, M
F., Hodgkinson, L., and Jaafar, A (2019), there is a downward trend in firm value Because
Older businesses tend to be more conservative in their operations and organizational structures, making it harder to embrace change or adopt new innovations This resistance to transformation can lead to inefficiencies and poorer business outcomes, ultimately diminishing the company’s value and competitive position in the market.
FIRMAGE = Considered year - The year that business was established (3.5)
Return on Assets (ROA): Kao, MF, Hodgkinson, L., and Jaafar, A (2019), AlNajjar,
B., and Kilincarslan, E (2016), Aluchna, M., and Kaminski, B (2017), Bajagai, RK, Keshari, RK, Bhetwal, P., Sah, RS, and Jha, RN (2019) claim that ROA has an effect on company‟s value ROA provides an overview of the company's performance
Return on Equity (ROE): Kao, MF, Hodgkinson, L., and Jaafar, A (2019), Bajagai,
According to RK, Keshari, RK, Bhetwal, P., Sah, RS, and Jha, RN (2019), there is an impact on firm value Return on Equity (ROE) reflects the overall outcomes of the company’s activities in terms of financial performance, serving as a key indicator of how efficiently equity is transformed into profits and how that performance influences firm value.
Table 3.1 Measurement of variable in thesis
Variable Measure Literature review Expected correlation Dependent – Enterprise’s value variable
Measured by Tobin's Q = (Market capitalization + Book value of debt) /
Book value of total assets
Al-NajAl-Najjar, B., and Kilincarslan, E (2016);
Aluchna, M., and Kaminski, B (2017); Kao, M F., Hodgkinson, L., and Jaafar, A (2019); Vo X.V.(2020), B., and Kilincarslan, E (2016); Aluchna, M., and Kaminski, B (2017); Kao, M F., Hodgkinson,
The proportion of shares held by the state or its representative over the total number of shares issued
Al-Najjar, B., and Kilincarslan, E (2016); Aluchna, M., and Kaminski, B (2017); Kao, M F., Hodgkinson, L., and Jaafar, A (2019);
The proportion of shares held by foreign over the total number of shares issued
Al-Najjar, B., and Kilincarslan, E (2016); Kao, M F., Hodgkinson, L., and Jaafar, A (2019); Vo X.V.(2020);
The existence of a major shareholder is valued at 0 and 1
Within this framework, 0 represents the absence of a major shareholder in the company, while 1 represents the presence of a major shareholder A major shareholder is defined as someone who directly or indirectly owns 5% or more of the voting shares of the issuing organization.
Al-Najjar, B., and Kilincarslan, E (2016); Aluchna, M., and Kaminski, B (2017); Kao, M F., Hodgkinson, L., and Jaafar, A (2019); Vo X.V.(2020);
Company size is measured by the natural logarithm of the total assets at the end of the fiscal year
Alzoubi, E S S (2016); Al-Najjar, B., and Kilincarslan,
E (2016); Bajagai, R K., Keshari, R K., Bhetwal, P., Sah, R S., and Jha, R N (2019); Kao, M F., Hodgkinson, L., and Jaafar, A (2019); Vo X.V.(2020);
Growth rate of revenue (considered annual revenue - previous year's revenue) / previous
Alzoubi, E S S (2016); Kao, M F., Hodgkinson, L., and Jaafar, A (2019); +/- year's revenue
The company's leverage = Total liabilities / Total assets
Alzoubi, E S S (2016); Bajagai, R K., Keshari, R K., Bhetwal, P., Sah, R S., and Jha, R N (2019); Kao, M
FIRMAGE The age of the business
Alzoubi, E S S (2016); Al-Najjar, B., and Kilincarslan,
E (2016); Bajagai, R K., Keshari, R K., Bhetwal, P., Sah, R S., and Jha, R.N (2019); Kao, M F., Hodgkinson, L., and Jaafar, A (2019);
ROA = Earnings before interest and taxes/ Total assets
Kao, M F., Hodgkinson, L., and Jaafar, A (2019), Al- Najjar, B., and Kilincarslan, E (2016), Aluchna, M., and Kaminski, B (2017), Bajagai, R K., Keshari, R K., Bhetwal, P., Sah, R S., and Jha, R N (2019)
ROE ROE = Earnings before interest and taxes/ Total equity Kao, M F., Hodgkinson, L., and Jaafar, A (2019) +
THE RESEARCH RESULTS
DESCRIPTIVE STATISTIC ANALYSIS
Descriptive statistics summarize core indicators, including the number of observations, the mean, the standard deviation, and the minimum and maximum values of the variables under study The analysis uses a dataset of 200 non-financial companies listed on the Ho Chi Minh Stock Exchange (HOSE) over an eight-year period from 2013 to 2020, ensuring a comprehensive view of performance and variability across the sample.
Table 4.1 Descriptive statistics of the variables
Variable Obs Mean Std.Dev Min Max
Source: Results of STATA’s data analysis
Table 4.1 presents statistics for 200 non-financial companies listed on the Ho Chi Minh Stock Exchange from 2013 to 2020, based on 1,600 observations Tobin's Q shows a mean of 1.06, a standard deviation of 33.2, and a range from 0.41 to 1.7.
Among non-financial companies listed on the Ho Chi Minh Stock Exchange, the average state ownership is 18.5%, with a maximum of 95.8% and a minimum of 0% (representing firms with no state ownership) The average foreign ownership stands at 11.4%, with a maximum of 36.8% and a minimum of 0% (no foreign ownership) These figures reveal a significant difference in ownership ratios between state-held and foreign-owned stakes within the market.
Across the sample, the average revenue growth rate is 0.068, with a high of 1.263 and a low of -0.901, signaling generally modest revenue expansion but substantial variation among studied companies The average enterprise size is 27.966, with a standard deviation of 1.197, and sizes range from 25.214 to 30.270, indicating that the selected enterprises are relatively equal in size The average age of the enterprises is 17.486 years, with a standard deviation of 7.169, reflecting considerable differences in corporate age across the sample The average return on total assets (ROA) is 7.982, with a standard deviation of 7.629, and the values span from -11.25 to 25.523, showing large disparities in asset profitability The average return on equity (ROE) is 12.929, with a standard deviation of 9.839, and the range from -1.102 to 34.978 indicates substantial variability in equity profitability across companies.
CORRELATION ANALYSIS
Besides descriptive statistical analysis, this study uses a correlation function to investigate linear correlations between variables The results of the linear correlation analysis are shown in Table 4.2.
Table 4.2 Results of correlation analysis of variables
TOBINSQ GOV FORG BLOCK FIRMAGE LEV GROWTH FIRMSIZE ROA ROE TOBINSQ 1
Source: Results of STATA’s data analysis
The result of correlation analysis based on Table 4.2:
Variable FIRMAGE and LEV have the opposite effect on TOBINSQ
All variables are GOV, FORG, BLOCK, GROWTH, FIRMSIZE, ROA, ROE have the positive effect on TOBINSQ
Table 4.2 shows the linear correlations among the studied variables, with correlation coefficients ranging from -1 to 1 to gauge their linear relationships TOBINSQ exhibits positive correlations with GOV (+0.1183), FORG (+0.2448), BLOCK (+0.104), GROWTH (+0.1391), FIRMSIZE (+0.1358), ROA (+0.5909), and ROE (+0.5958) Notably, foreign ownership (FORG) has a significant impact on enterprise value, reflecting how foreign ownership can enhance value through improved management capabilities, greater accessibility, and global development.
The results indicate that firm age (FIRMAGE) with a coefficient of -0.0423 and financial leverage (LEV) with a coefficient of -0.0715 are inversely related to firm value The debt burden directly affects profit and enterprise value, and higher financial leverage increases credit risk, meaning firms that rely more on debt face greater risk than those with less debt Consequently, there is a negative relationship between financial leverage and firm value Likewise, older enterprises exhibit greater operational inertia, which can reduce performance and lower enterprise value.
4.3 THE RESULT OF MULTICOLLINEARITY TEST THOUGH THE VIF
A high correlation coefficient among variables when analyzing co-integration signals multicollinearity in the model The variance inflation factor (VIF) is used to determine whether a variable is linearly correlated with the rest of the model According to the empirical rule, a VIF greater than 10 indicates high multicollinearity, which reduces the precision of regression coefficients Based on the VIF results from the linear regression analysis, variables with VIF values exceeding 10 are excluded from the model, and the regression analysis is repeated until no variables with VIF above 10 remain, thereby eliminating multicollinearity.
Table 4.3 Results of have no correlation between the independent variables
Variable VIF SQRT VIF Tolerance R - Squared
Variable VIF SQRT VIF Tolerance R - Squared
Variable VIF SQRT VIF Tolerance R- Squared
Source: Results of STATA’s data analysis
Table 4.4 reports the variance inflation factor (VIF) values for all independent variables across the three models, yielding VIFs of 2.3, 2.33, and 2.3 respectively All values are well below the conventional threshold of 10, indicating that multicollinearity is not a concern and that no multicollinearity issues affect the results.
THE RESULT OF ESTIMATE MODEL
To compare the fixed effects model (FEM) and the random effects model (REM), the author applies the Hausman test At a 5% significance level (alpha = 0.05), the Hausman test yields a p-value of 0.0000 and Prob > chi2 < 0.05, leading to the rejection of the null hypothesis that REM is consistent and efficient Consequently, the fixed effects model (FEM) is deemed appropriate for the study.
Table 4.4 Results of the Hausman test
FIRMSIZE 0.0279 0.0333 -0.0055 0.0146 b = consistent under Ho and Ha; obtained from xtreg
B = inconsistent under Ha, efficient under Ho; obtained from xtreg
Test: Ho: difference in coefficients not systematic chi2(4) = (b-B)'[(V_b-V_B)^(-1)](b-B)
Source: Results of STATA’s data analysis
To test the model between Pool - OLS and FEM, the author uses F-test With the significance level alpha = 5%, the F-test below gives the result: P-value = 0.0000, Prob> chi2 |t| [95% Conf.Interval]
_cons 0.0950 0.4989 0.1900 0.8490 -0.8837 1.0737 sigma_u 0.282544 sigma_e 0.19743 rho 0.671923 (fraction of variance due to u_i)
Source: Results of STATA’s data analysis
Table 4.6.Results of FEM model regression
Note: (*), (**), (***) have statistical significance of 10%, 5%, 1% respectively
Source: Results of STATA’s data analysis
Estimates from conventional regression analysis on tabular data become less reliable when error variance is heterogeneous This variability can mask the true significance of the independent variables, leading to misleading regression coefficients and invalid chi-square tests To ensure valid inference, the assumption of constant error variance should be tested, and the Modified Wald test can be employed to evaluate the null hypothesis H0: there is no variance change (homoscedasticity).
With a significance level of alpha = 5%, the Modified Wald test in appendix … yield: P-value = 0.0000 So, P-value has variable variance
Table 4.7 Results of the Modified Wald test
Modified Wald test for groupwise heteroskedasticity in fixed effect regression model
H0: sigma(i)^2 = sigma^2 for all i chi2 (200) = 3.2e+05
Source: Results of STATA’s data analysis
Estimates obtained from conventional regression methods applied to tabular data are no longer reliable because of interrelated errors The study tested the null hypothesis of no autocorrelation in the tabular data (H0: there is no autocorrelation).
With the significance level alpha = 5%, the Wooldridge test in table gives the result: P-value = 0.0000 As a result, P-value < 0.05 should reject the hypothesis H 0 => There is similar correlation
Table 4.8 Results of the Modified Wald test
Source: Results of STATA’s data analysis
Preliminary tests indicate multicollinearity is not a serious issue in the model The results also reveal a correlation between the error terms and heteroskedasticity, i.e., changing error variance across observations Consequently, ordinary least squares (OLS) estimates from the dataset are less reliable To obtain robust estimates, the author used Feasible Generalized Least Squares (FGLS) to correct for autocorrelation in the errors and heteroskedasticity.
Wooldridge test for autocorrelation in panel data
Table 4.9 Result of FGLS test to correct autocorrelation and variance change phenomenon
Note: (*), (**), (***) have statistical significance of 10%, 5%, 1% respectively
Source: Results of STATA’s data analysis
Using TOBINSQ as the dependent variable, the FGLS method was applied to correct for autocorrelation in the error terms and for heteroskedasticity (variance changes), ensuring a stable and efficient estimator This makes the model meaningful, with Prob > chi2 = 0.0000 indicating strong statistical significance Consequently, the model results are suitable and usable for interpretation and application.
The results indicate that the rate of state ownership, the rate of foreign ownership, and the presence of major shareholders each have a significant impact on firm value Moreover, the control variables influence the relationship between the independent variables and the dependent variable as expected, underscoring the importance of accounting for these factors when evaluating firm value.
State ownership has a positive influence on firm value, with the GOV regression coefficient equal to 0.0712 The results are statistically significant at the 95% confidence level (Prob = 0.000 < 0.05) This can be explained by the growing role of state ownership in improving business outcomes, where government timely support and policy interventions help solve enterprise problems and propel business growth.
Foreign ownership is positively correlated with firm value, with a regression coefficient of 0.324 for the FORG variable, a finding that aligns with theory and empirical studies in Vietnam (Vo X.V., 2020) and Taiwan (Kao, M F., Hodgkinson, L., & Jaafar, A., 2019) This suggests that firms with a higher foreign ownership ratio exhibit greater firm value than comparable firms with lower foreign ownership The presence of foreign investors as owners often brings valuable business and financial strategy guidance, which supports development and further enhances firm value.
Major shareholders positively affect firm value, as indicated by a positive coefficient for the BLOCK variable of 0.0621 Their direct and close supervision mechanism strengthens governance and controls, driving improvements in operational efficiency and strategic decision-making Consequently, stronger oversight by large shareholders contributes to higher corporate value and better long-term performance.
In addition, control variables also have a certain impact on firm value, this result is consistent with the theory and previous empirical studies
Table 4.10 Summary of research results
Research results Model 1 Model 2 Model 3 Independent variables
Note: positive impact (+), negative impact (-), no statistical significance (K)
Source: Results of author's research
Achieving perfect accuracy in reports and research models is extremely challenging due to the inevitable presence of bad or unusual data Effective outlier data processing can significantly improve the accuracy of predictive models and corporate reports In this study, the Winsorization method was used to synchronize the foreign variables, as shown in Table 4.3 Winsorization is the process of replacing some specified extreme values with a smaller data value, and it is named after biostatistician Charles P Winsor (1895–1951) Clipping is cited as an example of a signal processing effect.
CONLUSIONS AND RECOMMENDATIONS
OVERVIEW OF RESEARCH
This thesis examines the impact of ownership structure on the value of non-financial enterprises listed on the Ho Chi Minh City Stock Exchange (HOSE) over the period 2013–2020 Data were collected from audited financial statements of 200 enterprises each year, resulting in a balanced panel dataset of 1,600 observations The study provides insights into how ownership concentration and governance characteristics relate to firm value in HOSE-listed non-financial firms, offering evidence for investors, managers, and policymakers on corporate governance and capital structure in Vietnam’s emerging securities market.
Using panel data, this study applies several estimation methods—Pooled OLS, Fixed Effects (FEM), Random Effects (REM), and Generalized Least Squares (FGLS)—to assess how ownership structure, comprising state ownership, foreign ownership, and the presence of major shareholders, influences firm value By comparing results across these regression techniques, the research provides robust evidence on the relationship between ownership composition and enterprise value.
The results show that the structure of state ownership, foreign ownership, and the presence of major shareholders significantly affect the value of non-financial enterprises listed on the stock exchange On the Ho Chi Minh City Stock Exchange (HOSE) during 2013–2020, these effects are positive In addition, factors such as revenue growth, financial leverage, firm age, and firm size also influence the relationship between equity structure and firm value, as this thesis concludes.
Although many studies indicate that state ownership can have a negative impact on the value and performance of enterprises, in developing countries it can positively influence firm value by leveraging government policies such as a robust legal framework, favorable tax environments, and improved access to capital.
While foreign ownership has historically boosted firm value in developed economies, its impact in Vietnam depends on multiple factors such as regulatory clarity, market conditions, and corporate governance As a developing country, Vietnam has implemented policies to attract investment capital from abroad, streamline investment procedures, and improve the business environment Consequently, foreign ownership tends to positively affect firm value in Vietnam by enhancing access to capital, technology, and managerial expertise, though the magnitude of the effect varies by industry and policy framework.
The presence of major shareholders provides a strict supervision mechanism that positively influences a company’s value and performance These shareholders bring experience in financial markets and public governance, strengthening strategic oversight and accountability Consequently, firms with majority ownership by major shareholders often exhibit higher operating efficiency.
From a manager's perspective, enterprise value contributes to economic growth by fostering savings and investment Based on the 2013–2020 analysis of the impact of equity structure on the value of non-financial enterprises listed on HOSE, the study offers recommendations and actionable solutions for corporate leaders and policymakers to guide future management and investment decisions These insights aim to support the stable development of enterprises, enhance operational safety, and inform capital regulation that underpins the broader economy.
RECOMMENDATIONS FROM RESEARCH RESULTS
Research indicates that an appropriate level of state ownership can increase enterprise value by strengthening governance and guiding investment decisions, which supports better operational performance However, when the state ownership ratio is too high, it can hinder development and negatively affect the long-term value of the enterprise.
Foreign ownership positively affects firm value, so a higher foreign ownership ratio raises an enterprise's value Vietnam is actively attracting foreign investment and manufacturing, and when foreign ownership exceeds 51%, investors gain greater opportunities to participate directly in corporate governance This direct participation not only expands capital but also enhances governance capacity and competitiveness, enabling businesses to access global scientific and technological advances and modern machinery.
The presence of major shareholders can increase enterprise value by concentrating decision-making power, enabling faster and more focused operations Specialization in a clear strategic direction helps the company move quickly and execute plans efficiently However, centralized leadership also carries risks, as decisions may reflect subjective judgments or biases that lead to poor outcomes and potential failure.
Besides, the research results show that if the debt burden (financial leverage) is employed rationally and effectively, it will also bring positive values to the business.
sq: Obs per group
within = 0.0368 min = 8 between = 0.0002 avg = 8.0 overall = 0.0037 max = 8
TOBINSQ Coef Std Err t P>|t| [95% Conf.Interval]
_cons 0.0950 0.4989 0.1900 0.8490 -0.8837 1.0737 sigma_u 0.282544 sigma_e 0.19743 rho 0.671923 (fraction of variance due to u_i)
Source: Results of STATA’s data analysis
Table 4.6.Results of FEM model regression
Note: (*), (**), (***) have statistical significance of 10%, 5%, 1% respectively
Source: Results of STATA’s data analysis
Estimates obtained by conventional regression methods on tabular data can be less reliable when error variance varies across observations (heteroscedasticity) This variation can foster the mistaken belief that the independent variables in the model are meaningful, undermining the validity of the regression coefficients and the Chi-square test Because the changing variance degrades estimation accuracy, the assumption of constant error variance must be tested, and the Modified Wald test can be used for this purpose, with the null hypothesis H0: there is no variance change (constant error variance).
With a significance level of alpha = 5%, the Modified Wald test in appendix … yield: P-value = 0.0000 So, P-value has variable variance
Table 4.7 Results of the Modified Wald test
Modified Wald test for groupwise heteroskedasticity in fixed effect regression model
H0: sigma(i)^2 = sigma^2 for all i chi2 (200) = 3.2e+05
Source: Results of STATA’s data analysis
Estimates from conventional regression methods applied to tabular data are no longer reliable because the error terms are interrelated To address this issue, the study tests for autocorrelation in the data, with the null hypothesis H0: there is no autocorrelation The findings highlight that standard regression can produce biased inferences when errors are correlated, underscoring the need for approaches that account for autocorrelation to achieve reliable results in table-based analyses.
With the significance level alpha = 5%, the Wooldridge test in table gives the result: P-value = 0.0000 As a result, P-value < 0.05 should reject the hypothesis H 0 => There is similar correlation
Table 4.8 Results of the Modified Wald test
Source: Results of STATA’s data analysis
Partial test results indicate that multicollinearity is not a serious issue in the model; however, there is a notable correlation between the error terms and heteroskedasticity (variance changes), which implies that estimates from traditional regression methods on the table data may be unreliable To obtain reliable estimates, the author used Feasible Generalized Least Squares (FGLS) to address the autocorrelation of the errors and the variance-changing behavior.
Wooldridge test for autocorrelation in panel data
Table 4.9 Result of FGLS test to correct autocorrelation and variance change phenomenon
Note: (*), (**), (***) have statistical significance of 10%, 5%, 1% respectively
Source: Results of STATA’s data analysis
Using TOBINSQ as the dependent variable, the feasible generalized least squares (FGLS) method corrects autocorrelation in the error terms and addresses heteroskedasticity (variance changes), producing a stable and efficient estimation The model is statistically meaningful, with Prob > chi2 = 0.0000, indicating that the results are valid, reliable, and ready for interpretation and practical use.
Our results indicate that the three key independent variables—state ownership rate, foreign ownership rate, and the presence of major shareholders—significantly affect firm value; moreover, the control variables influence the strength and direction of the relationship between the independent and dependent variables as expected.
State ownership positively influences firm value, as shown by a regression coefficient of 0.0712 for the GOV variable, with statistical significance at the 95% confidence level (p = 0.000 < 0.05) This positive association reflects the growing impact of state ownership on business performance in recent years, where government timely support, policy interventions, and problem-solving assistance help enterprises grow and improve their results.
Foreign ownership is positively associated with firm value, evidenced by a regression coefficient of 0.324 for the FORG variable This finding aligns with theory and empirical research from Vietnam (Vo X.V., 2020) and Taiwan (Kao, M F., Hodgkinson, L., & Jaafar, A., 2019) Firms with higher foreign ownership ratios exhibit greater firm value than similar firms with lower foreign ownership, as foreign investors often contribute strategic business and financial guidance that enhances value creation.
The presence of major shareholders positively influences firm value, as indicated by a BLOCK coefficient of 0.0621 This reflects a direct and close supervision mechanism that improves governance and control Consequently, the enhanced operating efficiency driven by this oversight contributes to higher corporate value.
In addition, control variables also have a certain impact on firm value, this result is consistent with the theory and previous empirical studies
Table 4.10 Summary of research results
Research results Model 1 Model 2 Model 3 Independent variables
Note: positive impact (+), negative impact (-), no statistical significance (K)
Source: Results of author's research
Achieving absolute accuracy when creating reports or building research models is extremely difficult because bad or unusual data will always exist These outliers arise for various reasons depending on the circumstances and the business model Outlier data processing significantly improves the accuracy of predictive models and corporate reports Consequently, the author used the Winsorization method to synchronize the foreign variables, as shown in Table 4.3 Winsorization is the process of replacing some specified extreme values with a smaller data value It is named after biostatistician Charles P Winsor (1895–1951) Clipping is an example of a signal processing effect.
In the final chapter, this study synthesizes the main research results and presents counter-recommendations grounded in the evidence It also acknowledges the study’s limitations, outlining constraints and potential biases that could influence interpretation Finally, it maps out future research directions to address gaps, validate findings, and enhance practical applications.
This thesis examines the impact of ownership structure on the value of non-financial enterprises listed on the Ho Chi Minh City Stock Exchange (HOSE) from 2013 to 2020 Data were collected from audited financial statements for 200 enterprises each year, resulting in a balanced panel dataset of 1,600 observations over eight years The study analyzes the relationship between ownership structure and firm value among HOSE-listed non-financial firms, using panel data techniques to control for firm- and year-specific effects and to provide robust insights into how ownership patterns influence firm value.
This study applies a set of econometric techniques—Pooled OLS, fixed effects model (FEM), random effects model (REM) for panel data, and generalized least squares (FGLS)—to assess how ownership structure influences firm value It specifically investigates the impact of state ownership, foreign ownership, and the presence of major shareholders on enterprise value.
Evidence from the data shows that the ownership structure—specifically state ownership, foreign ownership, and the presence of major shareholders—affects the value of non-financial enterprises listed on the Ho Chi Minh City Stock Exchange (HOSE) in the period 2013–2020, with a positive impact In addition, firm characteristics such as revenue growth, financial leverage, age, and size influence how equity structure relates to firm value, according to the findings These results underscore the significance of ownership mix for firm value on HOSE and demonstrate that ownership effects are conditioned by firm fundamentals like growth, leverage, age, and scale.
Although many studies indicate that state ownership generally has a negative impact on a firm's value and performance, its effect can differ in developing countries, where state ownership may positively influence business value by drawing on government policies such as a solid legal framework, favorable tax conditions, and improved access to capital.
Foreign ownership has often been associated with higher firm value in developed economies, but the extent of its impact depends on a range of factors As a developing country, Vietnam implements policies to attract foreign investment, creating conditions where foreign ownership is likely to enhance firm value through capital inflows, improved governance, and access to international networks Consequently, the positive effect of foreign ownership on firm value is evident in Vietnam’s investment climate.