Các nhân tố ảnh hưởng đến kết quả kinh doanh của doanh nghiệp cổ phần hóa nghiên cứu tại việt nam tt tiếng anh

The actual situation of the equitization process in Vietnam shows that the ownership structure of many equitized enterprises have not changed much, the state is still a dominant stakehol

HO XUAN TIEN

FACTORS AFFECTING PERFORMANCE

OF EQUITIZED ENTERPRISES: A CASE OF

RESEARCH IN VIETNAM

Major: Commercial Business

Code: 9.34.01.21

SUMMARY OF ECONOMIC DISSERTATION

Ho Chi Minh City – 2019

SUMMARY OF ECONOMIC DISSERTATION

Ho Chi Minh City - 2019

& Associate Prof PhD Le Tan Buu Reviewer 1:

privatization and corporate performance of state-owned enterprises after privatization Journal of Vietnam Trade and Industry Review, ISSN 0866-7756, 49-53, No 9, Ha Noi

Ho Xuan Tien, 2016 Relationship between of type of managerial ownership and corporate performance of state-owned enterprises after privatization that were listed in Vietnam securities Journal of Vietnam Trade and Industry Review, ISSN 0866-7756, 79-83, No

10, Ha Noi

Bui Thanh Trang & Ho Xuan Tien, 2018 The Corporate entreprneurship theory in the context of the equitization of companies in Vietnam Journal of VN Trade and Industry Review, ISSN 0866-7756, 214-219, No 11, Ha Noi

CHAPTER 1: RESEARCH OVERVIEW

1.1 The important of the research

The transfer of ownership and control of SOEs from the state to the private sector is a privatization concept under the World Bank's widely accepted viewpoint (Shirley, 1992) However, in Vietnam, using the phrase ‘equitization’

is more appropriate, the privatization is a global term while the equitization is used more in Vietnam and it is understood as the transfer of SOEs to operate in the form of joint stock enterprises The agency theory, the property rights theory, the public choice theory all agree that the private ownership is inherently more effective than the state ownership in terms of economic benefits (Zhibin, 2004) so the transfer of the ownership and the control of SOEs from the state to the private sector is the best way to improve the economic landscape

The equitization is the main point of the restructuring program within SOEs during Vietnam’s restructuring process, from the SOE system of about 12,000 enterprises (Vu Thanh Tu Anh, 2005), after 25 years since 1992, the government has managed to reorganize many SOEs and successfully equitized more than 4,529 enterprises The number of SOEs grew from nearly 1,500 enterprises in 2010 (Ministry of Finance, 2016), as of the end of September

2017, to 562 enterprises which mainly operate in the areas of ensuring macroeconomic balances for the economy, security and national defense The actual situation of the equitization process in Vietnam shows that the ownership structure of many equitized enterprises have not changed much, the state is still

a dominant stakeholder and even a dominant decision make in the ownership structure, especially the State’s representative which is typical in Vietnam However, the practice of equitizing SOEs in Vietnam through financial indicators and Report No.436 / BC-CP on 17/10/2016, show that the majority of equitized enterprises achieved better performance than before, and there are even very impressive numbers Specifically, in the period 2011 - 2015, the

performance improved compared to the previous year, such as the charter capital increased by 73%, the total assets increased by 39%, the equity increased

by 60%, the revenue increased by 29%, the pre-tax profit increased by 49%, the budget payment increased by 29%, the average income of employees increased

by 33% (Ministry of Finance, 2016) The equitization in Vietnam has not changed the ownership structure of the whole economy, the state still has a dominant ownership which has significant control over the capital structure of equitized enterprises, however the performance are still very positive This is contrary to the theory of privatization and the conclusion of most studies on the inverse proportional relationship between the ratio of the state ownership in enterprises and performance

When assessing the performance of equitized enterprises, international and Vietnamese research often measure the performance of equitized enterprises in conjunction with different types of owners and performance, according to objective performance method that uses traditional financial indicators which are based on secondary financial data sources, hence this is often limited to the effect of different types of owners and performance, therefore it is impossible to explain the difference between the theory and the practice with the characteristics of equitization process in Vietnam By evaluating the performance from subjective performance measure which is based on the primary data source which is considered as opposite to the objective performance method, this research has expanded the scope of assessment of performance along with characteristics relating to the changes in ownership structure, corporate entrepreneurship and equitized enterprises’ expectations in the context of economic integration Thereby, the research is able to explain the cause of the differences between the theory and the practice of equitization in Vietnam and comes up with management implications for policy makers and leaders of equitized enterprises Moreover, the research theoretically contributes

to the corporate entrepreneurship that acts as a mediator variable with three alternatives as strategic renewal, venturing and innovativeness, at the same time, reinforcing the theory of privatization with the distinctiveness of equitization in Vietnam compared to other countries

On that basis, the topic "Factors affecting the performance of equitized enterprises: A case of research in Vietnam" is selected for this research

1.2 Goals

ownership structure, corporate entrepreneurship, the expectations in economic integration and the performance of equitized enterprises

and performance; change of ownership structure and corporate entrepreneurship; corporate entrepreneurship and perofrmance; corporate entrepreneurship and expected integration; expected integration and the performance of equitized enterprises

and the practice with the characteristics of equitization in Vietnam, and proposing the implication of administration as a scientific basis for making implementation decision on SOEs’ equitization process in the context of worldwide economic integration

1.2 Object and scope of the research

Research Objects: According to the research objectives above, the research

objects are the factors affecting the performance of equitized enterprises, including changes ownership structure, corporate entrepreneurship, expected integration, equitized enterprises’s performace of and the relationship among these factors together

Scope of research: Equitized enterprises are Vietnamese SOEs which have

been transformed and operated in the form of joint stock companies

Survey Objects: Survey objects in this qualitative research are experienced

experts who have been working in the field of equitization for many years Survey objects in this quantitative research are key members in equitized SOEs such as heads of departments, team leaders, board of directors or other management positions in equitized enterprises

The official research used quantitative methods with the following conventions: Scale reliability test, factor analysis EFA, CFA Testing the theoretical model of this research by SEM structure model The data analysis was conducted in SPSS and AMOS softwares

1.5 The research’s new contributions

Theoretical contributions

Although the agency theory, the property rights theory and the public choice theory have been verified in many studies around the world, however regarding the characteristics of equitization in Vietnam, it is necessary to have a specific verification to evaluate, reassert these theories, fill a gap of knowledge in the relationship between the equitization and the performance in the social and political environment of Vietnam In particular, by measuring performance according to the perceived level, the research results theoretically contribute to mediator variable of the corporate entrepreneurship accepted in the research

model with three components as strategic renewal, venturing and innovativeness

in the relationship between the changes in ownership structure and the performance of equitized enterprises

Practical contributions

The equitization process in Vietnam is very different compared to the rest of the world, it is equitization not privatization, the ownership structure changes are from a single owner which is the state to many forms of ownership in equitized enterprises, but the state still holds dominant shares and appoints representatives in most enterprises The agency theory, the public choice theory and the property rights theory claim that the state ownership is ineffective, but the practical situation in Vietnam shows that the performance in these enterprises are very positive There are many studies on the equitization and the performance around the world as well as Vietnam However, most of them only assess the performance by objective performance method which uses secondary financial data sources from the financial statements, so it can’t explain the difference between the practice and the theory when it comes to evaluate the performance of Vietnamese equitized enterprises in the past By using the subjective performance method based on the perceived level, the research results explain the cause of these differences Based on the research results, some policy implications are proposed to help the authorities improve the equitization process in the next phases

1.6 Research Structure

The research includes five chapters:

Chapter 1: Research Overview

Chapter 2: Theoretical basis and Research model

Chapter 3: Research methods

Chapter 4: Analysis of results and verification of research model Chapter 5: Conclusion and implications for management

CHAPTER 2: THEORETICAL BASIS AND RESEARCH MODEL 2.1 Definition of privatization and equitization

2.1.1 The concept of privatization

The term “Privatization” has many interpretations (Farazmand, 2001) in the broadest sense of transferring activities or functions from the State to the private sector, especially in the field of production and services (Starr, 1988), the simplest and concise interpretation is the concept of Hashemi & Abolghassem (1993), the market orientation is the most comprehensive definition to describe the nature of privatization However, the definition that is accessible, popular and widely accepted belong to the World Bank and IMF (Zhibin, 2004), the privatization is the transfer of ownership or control of SOEs from the government to the private sector

2.1.2 The concept of equitization

Privatization is a global phenomenon, an inevitable trend for many decades

of many economies around the world (Yuliya, 2011) and Vietnam as well However, due to the creative application according to this specific method in Vietnam, the term “Equitization” is used more often Under Decree 64/2002/ND-CP dated 06/19/2002, the equitization means the conversion of SOEs into joint stock enterprises, according to the four forms of equitization as follows: Maintaining the existing State ownership in enterprises, issuing shares

to attract more capital; selling a part of existing State ownership in enterprises; selling all existing state ownership in enterprises; implementing forms 2 or 3 combined with issuing shares to attract more capital

2.2 Privatization theory

2.2.1 Agency theory

According to Jensen & Merkling (1976), there exists a conflict of interests between the Principal and the Agent, resulting in employers facing opportunistic behavior and moral hazard from representatives

2.2.2 Property rights theory

The Property rights theory was initiated by Coase (1960), Furubotn & Pejovich, (1972) and Alchian & Demsetz (1973), which argued that differences

in the ownership will affect the motivation and economic behavior of the owner Private ownership will improve the motivation, benefits and behavior of owners, managers and employees Meanwhile, the lack of clarity and ambiguity in public ownership will negatively affect the dynamics of managers, negatively impact important decisions and deal with the consequences of decisions made

by general ownership status

2.2.3 Public choice theory

The public choice theory was initiated by Buchanan (1978), Ott & Hartley (1993); Gubin et al., (1999), the public choice theory argues that public owners' business results would not be good due to the political objectives and personal political interests of politicians Gubin et al., (1999) argues that this theory also applies to economic transition in various countries

2.3 Measuring performance

According to Dawes (1999), measuring performance using secondary financial data based on financial indicators known as objective performance measure Contrary to this method is the method of measuring performance by using primary data based on the perceived level of the respondents about performance with scales indicating the level from very bad to very good or very little, this is known as the subjective performance measure The equivalence and relevance of using perceived level of perception is viewed as the opposite of the measure based on objective data discussed by many researchers (Murphy & Callaway, 2004) Two studies by Dess & Robinson (1984); Gupta & Govindarajan (1984) are considered as the most strongly supporters of the use

of perceived measure to replace objective measurement methods (Murphy & Callaway, 2004) Although there are potential drawbacks in measurement (Keh

et al., 2007), Dess & Robinson (1984); Gupta & Govindarajan (1984) argued that with the absence of secondary data, it is possible to assess business performance of enterprises by other approaches through primary data collection,

by asking directly about business situation according to the perceived level

2.4 Research model and hypotheses

2.4.1 Research concepts

2.4.1.1 Change of Ownership Structure

The change of Ownership Structure in the research is understood as the state ownership transfer from SOEs to other forms of ownership when equitizing or from state ownership to other types of ownership since the state continues to divest after that

2.4.1.2 Expected integration

Vietnam joined WTO in 2007 which has created opportunities as well as challenges for domestic enterprises, Tho & Trang (2011) in research of WTO, Marketing, the ability to change within Vietnamese enterprises, defined expected WTO opportunity as the expectation on the benefits that WTO could bring to enterprises when Vietnam is a member of this organization Based on the definition of expected WTO opportunity, the concept of expected integration in the research is understood as an expectation of equitized enterprises on opportunities to seek partners and opportunities to change corporate governance

in the direction of international rules since Vietnam strongly integrates into the world economy

2.4.1.3 Corporate Entrepreneurship - CE

Since 1980, researchers have expanded the concept of measuring the trend of businesses towards entrepreneurship in association with the issue of enterprise comprehensive renewal to survive in the harsh changes of environment (Baumol, 1986; Burgelman, 1983; Kanter, 1989) or create new ones that bring new vitality to the development process of businesses (Schendel, 1990) Guth &

Ginsberg (1990) is considered to be a pioneer in expanding the measuring of entrepreneurship trends of businesses, and believes that this trend includes two main points: internal innovation with new venture creation and transforming the development of businesses through strategic renewal Zahra (1991) inherited the

CE concept of Guth & Ginsberg (1990) and previous studies, then approached the entrepreneurship concept with the corporate entrepreneurship from the centralized point of view of actual entrepreneurship activities in businesses, not the trend towards entrepreneurship as the measurement of the concept of EO Zahra (1991, 1993) argued that CE is a multidirectional concept consisting of three adventurous components venturing; innovativeness and strategic renewal and building measurement scale with 14 observed variables

2.4.2 Research hypotheses

2.4.2.1 Corporate entrepreneurship and performance

The corporate entrepreneurship theory to understand enterprises explains the advantages of pioneering, temporary monopoly of the company, competing with competitors in the industry, always looking for ways to compete, creating new fluctuations and destroy the old ones (Nguyen Thanh Long, 2012), innovating the existing strategies to boost the ability to meet the market demands (Antocic

& Hisrish, 2003) The enterprises that have the corporate entrepreneurship are always proactive and pioneering in proposing, implementing new ideas and production processes to meet the internal and external environment to create pioneering advantages (Keh et al., 2007) The corporate entrepreneurship is seen

as an important factor of the organization, bringing a new revitalization to the future of enterprises (Schollorhhammer, 1982), not only important for large enterprises but also necessary for medium and small enterprises (Covin & Slevin, 1991), for developed countries and economic transition countries (Antoncic & Hisrich, 2003) The corporate entrepreneurship is related to the process of implementing the strategy, in which the core point is to maintain the

vision in the future (Lumpkin & Dess, 1996) In a dynamic and competitive business environment, the profits earned in the future are uncertain, so businesses need to constantly seek new opportunities to exploit these opportunities effectively (Zhou et al., 2007)

Many previous researchers also agreed that the corporate entrepreneurship is

an important factor contributing to enterprises’ financial profits (Kuhn et al., 2010), enterprises with high corporate entrepreneurship achieve higher financial profits compared those with less interest in it (Wiklund & Shepherd, 2005) According to Antocic & Hisrish (2003), the corporate entrepreneurship positively impacts their performance Business opportunities and barriers in the modern business environment are constantly changing, only businesses with the corporate entrepreneurship of mastering their businesses can realize and grasp these opportunities quickly to actively respond to changes and create advantages

as follows:

H 1 : The corporate entrepreneurship has a positive impact on the performance of equitized enterprises

2.4.2.2 Change in ownership structure and corporate entrepreneurship

In any form, the privatization brings two positive effects for enterprises, namely stastic efficiency and dynamic efficiency, in which dynamic efficiency

is seen as a change to improve corporate governance, stimulating innovativeness, creation in businesses (Shirley, 1992) Privatization has affected and changed the consciousness, management thinking, created opportunities for the development of the private sector, especially the foreign economic sector during capital ownership structure process, supporting enterprises to replace change governance system according to modern trends and internationalization (Paul, 2013) Privatization can be seen as a core decision for businesses to be entrepreneurial (Antoncic & Hisrish, 2003)