Quoc Trung Tran, Xuan Minh Nguyen, Tuan D. Nguyen, Thi Trung Nguyen, T. Dao, Quang Tam Nguyen
{"title":"State ownership and corporate investment: evidence from Vietnamese stock market","authors":"Quoc Trung Tran, Xuan Minh Nguyen, Tuan D. Nguyen, Thi Trung Nguyen, T. Dao, Quang Tam Nguyen","doi":"10.38203/jiem.023.1.0060","DOIUrl":null,"url":null,"abstract":"The literature shows that the relationship between state ownership and corporate investment is debatable. This study examines this relationship in Vietnam as a transitional economy. Our sample consists of 4,680 observations from 2009 to 2020. Using fixed effects and random effects for panel data, random effects Tobit, and pooled OLS, we find that state ownership decreases investment expenditures. Moreover, this negative impact is stronger if the firms are financially unconstrained. Our results indicate that weak corporate governance and soft budget constraints arising from state ownership may fail to determine investment decisions. A government’s negative attitude toward risk and conservatism may effectively affect corporate investment.","PeriodicalId":42721,"journal":{"name":"International Journal of Economics Management and Accounting","volume":null,"pages":null},"PeriodicalIF":0.4000,"publicationDate":"2023-03-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Economics Management and Accounting","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.38203/jiem.023.1.0060","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q4","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 1
Abstract
The literature shows that the relationship between state ownership and corporate investment is debatable. This study examines this relationship in Vietnam as a transitional economy. Our sample consists of 4,680 observations from 2009 to 2020. Using fixed effects and random effects for panel data, random effects Tobit, and pooled OLS, we find that state ownership decreases investment expenditures. Moreover, this negative impact is stronger if the firms are financially unconstrained. Our results indicate that weak corporate governance and soft budget constraints arising from state ownership may fail to determine investment decisions. A government’s negative attitude toward risk and conservatism may effectively affect corporate investment.