Difference in the role of public governance for enterprises performance of ownership types in Vietnam

Abstract

ABSTRACT This paper aims to examine the difference in role of public governance on the performance of each business ownership type in Vietnam. Using FGLS regression and Blinder – Oaxaca decomposition methods, the study finds out gaps of enterprises performance among state-owned enterprises, non-state enterprises and FDI enterprises in Vietnam in the period 2016–2019. The variation is due to business characteristics and distinction between ownership types. Besides, the decomposition results show that public governance is a factor of the enterprises performance’s differentiation in Vietnam, and state-owned enterprises are often more favoured than FDI enterprises and non-state enterprises. Incentives for state-owned enterprises are mainly presented in policies, such as information public and transparency, reducing time-cost, reducing informal charges and local fair competition promotion. Meanwhile, incentives for FDI enterprises are mainly presented in policies, such as land policy, information public and transparency, reducing time-cost, fair competition promotion, business support services, local legal frame and security. Specifically, the study implies that improving public governance in Vietnam in the period 2016–2019 has resulted in positively effect on state-owned enterprises’ performance and fairly low effect on those of FDI enterprises and non-state enterprises.