The impact of agency cost on firm performance: a comparison between stateowned and nonstateowned enterprises listed on Vietnam stock market.

The impact of agency cost on firm performance: a comparison between stateowned and nonstateowned enterprises listed on Vietnam stock market.The impact of agency cost on firm performance: a comparison between stateowned and nonstateowned enterprises listed on Vietnam stock market.The impact of agency cost on firm performance: a comparison between stateowned and nonstateowned enterprises listed on Vietnam stock market.The impact of agency cost on firm performance: a comparison between stateowned and nonstateowned enterprises listed on Vietnam stock market.The impact of agency cost on firm performance: a comparison between stateowned and nonstateowned enterprises listed on Vietnam stock market.The impact of agency cost on firm performance: a comparison between stateowned and nonstateowned enterprises listed on Vietnam stock market.The impact of agency cost on firm performance: a comparison between stateowned and nonstateowned enterprises listed on Vietnam stock market.The impact of agency cost on firm performance: a comparison between stateowned and nonstateowned enterprises listed on Vietnam stock market.The impact of agency cost on firm performance: a comparison between stateowned and nonstateowned enterprises listed on Vietnam stock market.The impact of agency cost on firm performance: a comparison between stateowned and nonstateowned enterprises listed on Vietnam stock market.The impact of agency cost on firm performance: a comparison between stateowned and nonstateowned enterprises listed on Vietnam stock market.The impact of agency cost on firm performance: a comparison between stateowned and nonstateowned enterprises listed on Vietnam stock market.The impact of agency cost on firm performance: a comparison between stateowned and nonstateowned enterprises listed on Vietnam stock market.

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY Le Hoang Yen Khanh THE IMPACT OF AGENCY COST ON FIRM PERFORMANCE: A COMPARISON BETWEEN STATE-OWNED AND NON-STATE-OWNED ENTERPRISES LISTED ON VIETNAM STOCK MARKET DOCTOR OF PHILOSOPHY IN ECONOMICS Ho Chi Minh city - 2022 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY Le Hoang Yen Khanh THE IMPACT OF AGENCY COST ON FIRM PERFORMANCE: A COMPARISON BETWEEN STATE-OWNED AND NON-STATE-OWNED ENTERPRISES LISTED ON VIETNAM STOCK MARKET Major: Finance and Banking Reference: 9340201  DOCTOR OF PHILOSOPHY IN ECONOMICS ACADEMIC SUPERVISORS: Dr Pham Phu Quoc Dr Tran Phuong Thao Ho Chi Minh city - 2022 (this page is intentionally blank) i ACKNOWLEDGEMENTS I acknowledge that this submission is my own work and except for the reference, this thesis contains no material previously published or written by other authors This thesis does not contain material pressed out from a thesis or document presented for any degree or diploma at University of Economics Ho Chi Minh city or other educational institutions This research is not the work of mine only but to complete this thesis, I have been benefited from the following people: Firstly, the most important people who set the light on my research from the beginning are my advisors – Dr Pham Phu Quoc and Dr Tran Phuong Thao They are always by my side to support me from initial ideas and then develop the thought into the final research Secondly, I would like to express my gratitude to my family members who nurture my passion of higher education, especially, my parents and beloved husband who assist in taking care of me from pregnancy and our newborn baby to accomplish this study And the last but not least, my managers always stay with me when I have problem and get stuck They never leave me but provide me with useful solutions to finish my research Le Hoang Yen Khanh January 2021 ii TABLE OF CONTENT ACKNOWLEDGEMENTS………………………………………….… …………….i TABLE OF CONTENT…………………………………………………….… ………ii LIST OF ABBREVIATIONS………………………………………… ………… vii LIST OF TABLES…………………………………………………… ……… …….viii LIST OF FIGURES………………………………………………………… ………xi ABSTRACT…………………………………………………………………………… xii CHAPTER 1: INTRODUCTION 1.1 INTRODUCTION 1.2 PRACTICAL RESEARCH CONTEXT 1.3 RESEARCH MOTIVATIONS 1.4 RESEARCH OBJECTIVES AND QUESTIONS 1.5 DATA, METHODOLOGY 13 11 1.5.1 Data .13 1.5.2 Methodology 14 1.6 CONTRIBUTIONS 15 1.7 STRUCTURE OF THE THESIS 15 CHAPTER 2: LITERATURE REVIEW 26 2.1 2.2 INTRODUCTION 26 AGENCY COST AND FIRM PERFORMANCE: THEORY AND EVIDENCE 27 2.2.1 Agency cost in business operation 27 2.2.2 Impact of agency cost on firm performance 31 2.2.3 Different relationship between agency cost and firm performance in SOEs and non-state-owned-enterprises 38 2.2.3.1 Agency cost and firm performance in SOEs 39 2.2.3.2 Agency cost and firm performance in non-state-owned enterprises 45 2.2.4 Hypotheses for the comparison of agency cost in SOEs and non-stated owned enterprises .49 2.2.5 Hypotheses for different relationship between agency cost and firm performance.52 2.3 STATE-OWNERSHIP EVIDENCE 55 2.3.1 AND FIRM PERFORMANCE: THEORY AND The role of state ownership 55 iii 2.3.2 State involvement in listed firms 57 2.3.3 Hypotheses for the relation between state ownership and firm performance 62 2.4 CHAPTER SUMMARY 65 CHAPTER 3: DATA AND METHODOLOGY 3.1 INTRODUCTION 3.2 DATA 69 69 69 3.2.1 Type of data 69 3.2.2 Sample 70 3.2.3 Data collection 71 3.3 VARIABLE DEFINITION 74 3.3.1 Proxies for agency cost 74 3.3.2 Measures of firm performance 76 3.3.3 Measure of state ownership 78 3.3.4 Measure of control variables 78 3.3.4.1 Internal factors Capital structure 78 79 Sales growth 79 Profit growth 80 Investment opportunity 80 3.3.4.2 External factors 80 Gross Domestic Product (GDP) growth rate 81 Consumer Price Index (CPI) 81 Country investment growth rate 81 3.4 83 MODEL SPECIFICATON 3.4.1 General model specification 83 3.4.2 Methodology for comparison of the agency cost of state-owned firms and nonstate-owned enterprises 86 3.4.2.1 Model for the comparison of agency cost of two groups of enterprises 3.4.2.2 Estimation method 86 86 3.4.3 Methodology for the different impact of agency cost on firm performance of two groups of enterprises .87 3.4.3.1 Model for the different impact of agency cost on firm performance of two groups of enterprises 87 3.4.3.2 Estimation method 88 3.4.4 Methodology for the relationship between state-ownership and firm performance89 3.4.4.1 Model for the relationship between state-ownership and firm performance89 iv 3.4.4.2 Estimation method 3.5 90 ROBUSTNESS TESTS 93 3.5.1 Different proxies for agency cost 93 3.5.2 Alternative measures for firm performance 94 3.5.3 Other method of estimation 94 3.6 CHAPTER SUMMARY 95 CHAPTER 4: EMPIRICAL RESULTS 4.1 INTRODUCTION 96 96 4.2 DESCRIPTIVE STATISTICS AND CORRELATION TEST 96 4.2.1 Descriptive statistics .96 4.2.2 Correlation analysis .100 4.3 COMPARISON OF AGENCY COST OF TWO GROUPS OF ENTERPRISES 102 4.3.1 Comparison of agency cost of two groups of enterprises 102 4.3.1.1 Graph illustration 102 4.3.1.2 Independent sample T-test and Wilcoxon signed-rank test 103 4.3.1.3 Results 104 4.3.2 Summary for the comparison of agency cost of two groups of enterprises 105 4.4 DIFFERENT IMPACT OF AGENCY COST ON FIRM PERORMANCE OF TWO GROUPS OF ENTERPRISES 107 4.4.1 The negative relationship between agency cost and firm performance 107 4.4.1.1 Pooled OLS regression 107 4.4.1.2 Fixed and random effect regression 110 4.4.4.3 Results 113 4.4.2 The different impact of agency cost on firm performance of two groups of enterprises .114 4.4.2.1 Pooled OLS regression 114 4.4.2.2 Fixed and random effect regression 117 4.4.2.3 Results 121 4.4.3 Summary for the different impact of agency cost on firm performance of two groups of enterprises .122 4.5 THE RELATIONSHIP PERFORMANCE 124 BETWEEN STATE OWNERSHIP AND FIRM 4.5.1 The negative relationship between state-ownership and firm performance .125 4.5.1.1 Pooled OLS regression 125 4.5.1.2 Fixed and random effect regression 129 v 4.5.1.3 Results 135 4.5.2 The non-linear relationship between state ownership and firm performance .135 4.5.2.1 Pooled OLS regression 135 4.5.2.2 Fixed and random effect regression 138 4.5.2.3 Results 142 4.5.3 Summary for the relationship between state ownership and firm performance .143 4.6 RESULTS FOR CONTROL VARIABLES AND ROBUSTNESS TESTS 144 4.6.1 Results for control variables .144 4.6.2 Robustness tests 146 4.6.2.1 Different proxy for agency cost 146 4.6.2.2 Alternative measure for firm performance 156 4.6.2.3 Other estimation method 160 4.7 CHAPTER SUMMARY 166 CHAPTER 5: CONCLUSION 5.1 INTRODUCTION 168 168 5.2 REVIEW OF RESEARCH QUESTIONS AND DISCUSSIONS 168 5.2.1 Comparison of agency cost of state-owned and non-state-owned enterprises 170 5.2.2 Different impact of agency cost on firm performance of two groups of enterprises 171 5.2.3 Relationship between state ownership and firm performance 173 5.3 IMPLICATIONS 174 5.4 LIMITATIONS 180 PUBLICATIONS………………………………………………………………… …182 REFERENCE…………………………………………………………………………183 APPENDIX A - PRE-ESTIMATION DIAGNOSTIC TESTS…………………….209 A1 ANALYSIS OF THE MULTICOLLINEARITY AMONG INDEPENDENT VARIABLES – VARIANCE INFLATION FACTOR (VIF)…………………… ….209 A2 TEST FOR AUTOCORRELATION IN PANEL DATA…………… 210 A3 TEST FOR HETEROSKEDASTICITY IN PANEL DATA…………………… 210 APPENDIX B – THE DEFINITIONS OF TWO TERMS “STATE-OWNED ENTERPRISES” AND “NON-STATE-OWNED ENTERPRISES”………… ….211 B1 STATE-OWNED ENTERPRISES……………………………………………… 211 B2.NON-STATE-OWNED ENTERPRISES………………………………………….213 vi APPENDIX C: OVERVIEW OF RESEARCH CONTEXT……………………….215 C1 VIETNAM ECONOMY……………………………………………………… ….215 C2 PRIVATIZATION PROCESS………………………………………………… …217 vii LIST OF ABBREVIATION BOD : Board of Director CPI : Customer Price Index FEM : Fixed Effect Model FCF : Free Cash Flow FDI : Foreign Direct Investment GDP : Gross Domestic Product GFC : Global Financial Crisis G&A : General and Administrative GMM : Generalize Method of Moments HOSE : Ho Chi Minh Stock Exchange HNX : Hanoi Stock Exchange Non-SOEs : Non-state-owned Enterprise NPV : Net Present Value OLS : Ordinary Least Squares OTC : Over the counter OECD : Organization for Economic Co-operation and Development POE : Private-owned Enterprises REM : Random Effect Model ROE : Return on Equity ROA : Return on Asset RQ1 : Research question RQ2 : Research question RQ3 : Research question SOE : State-owned Enterprise Upcom : Unlisted Public Company Market VND : Vietnam Dong ...MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY Le Hoang Yen Khanh THE IMPACT OF AGENCY COST ON FIRM PERFORMANCE: A COMPARISON BETWEEN STATE-OWNED AND NON-STATE-OWNED... RESEARCH QUESTIONS AND DISCUSSIONS 168 5.2.1 Comparison of agency cost of state-owned and non-state-owned enterprises 170 5.2.2 Different impact of agency cost on firm performance of two groups of. .. comparison of the agency cost of state-owned firms and nonstate-owned enterprises 86 3.4.2.1 Model for the comparison of agency cost of two groups of enterprises 3.4.2.2 Estimation