tailieunhanh - Privatization a solution to the development of the private sector in Ho Chi Minh city

The research also reaffirms that the governmental decision on privatization is rational, and simultaneously manifests the impact of ownership modes on the business performance. Eventually, the research results can be consulted by business administrators and policy-makers. | Public investment & restructuring of Public sector This research is to investigate impacts of privatization on the development of privatized state-owned enterprises (abbreviated as SOEs) as part of the private sector. Such development is measured by the pre- and post-privatization business performance of 63 HCMC-based SOEs, half of which were privatized in 2004. Results pointed out a substantial rise in profit, sale revenue, workforce, laborer’s income, and performance of surveyed enterprises. The difference-in-differences (DID) estimator is employed to compare SOEs and privatized ones in terms of their performance in the same period; and findings illuminated that privatized SOEs perform more efficiently. Besides, regression analyses also show that factors affecting the performance include company size, state ownership, and type of business. The research also reaffirms that the governmental decision on privatization is rational, and simultaneously manifests the impact of ownership modes on the business performance. Eventually, the research results can be consulted by business administrators and policy-makers. Keywords: privatization, SOEs, business performance, private sector 1. Introduction As of the vcP 6th congress in 1986, vietnam’s government has expedited the reform and restructuring for the sake of soes with a view to promoting the leading role of soes in the national economy. since then, the privatization of soes is deemed as an important factor in the vietnamese economy in its transition from a centrally-planned to a market-oriented mechanism. the reduction in the state ownership in soes is a strategic remedy, that is, it sheds light on extant weaknesses and drawbacks of the subsidy-based mechanism, facilitates the mobilization of capital from the private sector, encourages a proactive management and dynamic for development, and improves the business performance. 2 Economic Development Review - May 2011 since open-door policies came into being, .