State ownership and corporate investment: evidence from Vietnamese stock market

Quoc Trung Tran1,, Xuan Minh Nguyen1, Tuan Duong Nguyen1, Thi Trung Nguyen1, Thi Huong Dao2, Quang Tam Nguyen3
1 Foreign Trade University, Ho Chi Minh City, Vietnam
2 Thuyloi University, Hanoi, Vietnam
3 Sacombank – Quang Ngai Branch, Quang Ngai Province, Vietnam

Main Article Content


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.

Article Details


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