Has Equitization Actually Led to Improve Firm Performance in a Transition Economy?

This paper determines the impact of equitization on firm performance in Vietnam. With research data including the majority of large-scale equitized enterprises in the third period of equitization in Vietnam, this research plays an important role in explaining whether large-scale enterprises can improve firm performance after equitization or not. With a new approach to assess the direct impact of equitization on firm performance through a combination of the with-without comparison method and the weighted regression method, the study has revealed that equitization does not help to improve firm performance in Vietnam if compared with non-equitized SOEs in the same period, typically in terms of profitability and operating efficiency. Thus, these results explain why most SOEs are not interested in joining equitization programs in Vietnam. The results of this study are in contrast to previous studies in developed and developing countries but there are some similarities with studies in China by Liao et al. (2014) and Wei et al. (2003).