Labor and Its Efficiency in Equitized State-owned Enterprises in Vietnam

Thi H O Nguyen ,Manh Dung Tran

doi:10.7176/rjfa/10-5-10

Abstract

This study is conducted for evaluating changes in labor efficiency of state-owned enterprises after equitization. Data were collected from audited financial statements and reports of labor and average income in 138 state owned enterprises after equitization. After calculating labor efficiency according to revenue and earnings of enterprises in the sample, we apply the comparative method for labor, average income and labor efficiency before and after equitization. Then, we use the Wilcoxon Signed-Rank Test to compare the fluctuation in the ratios between two years after equitization with one year prior to equitization. The results show that after equitization, enterprises achieve an increase in average number of labor, improved average labor income and enhanced labor efficiency. Keywords: Equitization, state-owned firm, labor efficiency, Vietnam. DOI : 10.7176/RJFA/10-5-10 Publication date :March 31 st 2019

Highlights

Labor is the core force, the property and the most important factor the enterprises
With the aim of collecting information 1-2 years prior to equitization, on Hanoi Stock Exchange (HNX) and Ho Chi Minh Stock Exchange (HOSE), we focused on equitized enterprises and those that are listed on the stock exchange within 0-2 years after equitization
Even though there was an increase in the number of labor, average income rose and even at a higher growth rate

Summary

Introduction

Labor is the core force, the property and the most important factor the enterprises. They directly create products, profits for the enterprises. If the enterprise has a labor force with good professional qualifications, productivity will be higher. Low productivity has always been a big issue in State-owned enterprises due to high labor redundancy, low skill, unreasonable task assignment, and outdated machinery and equipment, which lead to frequently low productivity (Tran et al, 2006, 2007). After equitization, are there actual changes in the number of labor and labor efficiency in State-owned enterprises and what is the direction of change?

Methods

Results

Conclusion