Government Intervention and Investment Efficiency: Empirical Evidence from Vietnam
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The government ownership's impact on the investment efficiency of enterprises in the transitional market – Vietnam – was studied using the model of Tobin's Q, which measures the interaction between investment spending and the opportunities for investing as a scale. The study exercises the method of the linear regressions based on OLS model with a sample of 251 companies listed on the Ho Chi Minh Stock Exchange from 2015 to 2019. The empirical results indicate that there is no relationship between firm investment spending and investment opportunities in state-owned enterprises (SOEs). Furthermore, in non-state-owned enterprises (non-SOEs), this relationship exists at a positively minimal level. In addition, the results also show the negative relationship between leverage and firm's investment spending in Vietnam. Separately, there is a negative association between net operating cash flow and investment expenditure for SOEs while there is a negative link between firm's size and funds for investing in non-SOEs.
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