The Impact of State Ownership, Leverage Over Firm Performance of Vietnamese Listed Firms
The paper overviews relationship among state ownership, leverage and firm performance of Vietnamese listed
firms. Previous papers in developed countries show that both state ownership and debt have negative relationship with the
firm performance. However, in the context of Vietnamese listed firms, I consider that the interplay of these conditions may
not be harmful, especially under investors’ viewpoint. I test my hypotheses with the sample of 1455 Vietnamese listed
companies from 4 stock exchange markets: HoSE, HNX, OTC, and Up Com during the period from 2003 to 2017. The
dataset includes 11,045 observations. The state firms in this sample is the largest shareholder which control more than 50%
shares of the firms. The debt structure focuses on different term of debt (short-term vs. long term), and firm performance is
distinguished between accounting and market performance. The results show state ownership does not affect the accounting
performance but it has some impact over the market performance. The investors seem to consider that state firms have more
expropriation risk. Similar to the developed countries, debt structures have significantly negative impact over both
accounting and market performance. It may imply that agency issues facilitate higher debt in the capital structure. However,
their interaction may have some positive impact on firm performance.
Index terms - State ownership, leverage, firm performance, Vietnam.