tailieunhanh - Impact of equitization on performance of enterprises in Vietnam

This study reveals that debt ratio, total asset turnover, and the number of employees have significantly decreased after equitization. However, no evidence is found regarding the effect of equitization on productivity of equitized firms. | 36 Truong Dong Loc & Ngo My Tran / Journal of Economic Development 23(3) 36-56 Impact of Equitization on Performance of Enterprises in Vietnam TRUONG DONG LOC Can Tho University – tdloc@ NGO MY TRAN Can Tho University – nmtran@ ARTICLE INFO ABSTRACT Article history: The main objective of this study is to measure the impact of equitization on firm performance in Vietnam. The dataset, retrieved from the survey on enterprises conducted by the General Statistics Office of Vietnam (GSO), consists of 301 equitized state-owned firms and 127 unequitized state-owned firms during the period from 2007 to 2010. By using propensity score matching (PSM) combined with difference in differences (DID) approach, we find that equitization has positive impacts on the ratio of income before tax to total assets and the ratio of income before tax to sales. Moreover, this study reveals that debt ratio, total asset turnover, and the number of employees have significantly decreased after equitization. However, no evidence is found regarding the effect of equitization on productivity of equitized firms. Received: Aug. 16 2014 Received in revised form: July 01 2015 Accepted: June 20 2016 Keywords: Equitization, firm performance, PSM and DID. Truong Dong Loc & Ngo My Tran / Journal of Economic Development 23(3) 36-56 37 1. Introduction Since the political upheaval at the end of the 80s, most transition economies in the world have activated their projects of privatization. A move from state to private ownership enables firms to be more active along with their more effective performance. Despite the fact that privatization is affirmed to be a suitable approach for reforming state-owned enterprises (SOEs), a certain few of issues have yet to be clearly addressed; for example, in which specific circumstance does the privatization process become successful, or how does it influence firm performance as well as macroeconomic development of a country? Some studies have .