State ownership’s dual impact: Agency costs in vietnam’s construction and real estate sector

Abstract

This study examines the impact of state ownership on agency costs in Vietnam’s real estate industry from 2011 to 2023. Using a dual-proxy approach—Total Operating Expenses Ratio (TOER) and Total Asset Turnover (TAT)—we analyze data from 122 listed firms. Findings indicate that state ownership raises the TOER due to bureaucratic inefficiencies but also boosts TAT through state-supported resources, demonstrating a dual influence. By combining agency and institutional theories, the study reveals how Vietnam’s governance, shaped by political influences, regional differences, and corruption, impacts these effects. Policy suggestions include establishing professional boards, ensuring transparent land allocation, and implementing anti-corruption strategies to better align state goals with market efficiency. These findings aim to guide governance reforms in Vietnam and similar transitioning economies in Asia.