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TABLE OF CONTENTS
ABBREVIATIONS………………………………………………………………………… i
LIST OF TABLES…………………………………………………………………………. ii
LIST OF FIGURES……………………………………………………………………….. v
ABSTRACT………………………………………………………………………………… vi
CHAPTER 1: INTRODUCTION…………………………………………………….. 1
- Thesis motivations …………………………………………………………………………………… 1
1.4.5. Contributions…………………………………………………………………………………. 10
CHAPTER 2: OVERVIEW ON VIETNAM’S ECONOMIC REFORMS 11
CHAPTER 3: FINANCIAL CONSTRAINTS AND INVESTMENT: A THEORETICAL FRAMEWORK AND LITERATURE REVIEW……… 27
- Theories of investment……………………………………………………………………………. 29
CHAPTER 4: FIRM’S INVESTMENT – CASH FLOW RELATIONSHIP IN THE CONTEXT OF STATE OWNERSHIP IN VIETNAM……………………… 51
- The study introduction……………………………………………………………………………. 52
CHAPTER 5: FIRM’S INVESTMENT – CASH FLOW RELATIONSHIP UNDER THE CONTEXT OF BANKING SYSTEM REFORM IN VIETNAM… 92
- The Stuty Introduction…………………………………………………………………………….. 93
- Literature review…………………………………………………………………………………….. 96
CHAPTER 6: CONCLUSION……………………………………………………… 131
- Introduction …………………………………………………………………………………………. 131
LIST OF AUTHOR’S PUBLICATIONS……………………………………….. 140
REFERENCES………………………………………………………………………….. 141
APPENDIX………………………………………………………………………………. 147
ABBREVIATIONS
Agribank Vietnam Bank for Agriculture and Rural Development ASEAN Association of Southeast Asian Nations
ATFA ASEAN Free Trade Agreement
BIDV Bank for Investment and Development of Vietnam CPI Consumer Price Index
FDI Foreign direct investment
GDP Gross Domestic Products
HCMC Ho Chi Minh City
HNX Hanoi Stock Exchange
HOSE Ho Chi Minh City Stock Exchange JSCB Joint-stock commercial bank
JVB Joint – venture bank
MM Modigliani and Miller Theorem
SBV State Bank of Vietnam
SOCB State-owned commercial bank SOE State owned enterprise
US United States of America
VCB Bank for Foreign Trade of Vietnam Vietinbank Vietnam Industrial and Commercial Banks WTO World Trade Organization
Table 2.1 Stages of SOE equitization in Vietnam (1992 – 2018) 17
Table 2.2 Credit institutions of Vietnam, 2010 – 2017 22
Table 2.3 List of foreign banks’ branches in Vietnam 23
Table 3.1 Summary of Financial Constraint Proxies 43
Table 4.1 Sample structure 65
Table 4.2 Variable descriptive statistic 66
Table 4.3 Differences between non state-owned and state-owned 67
enterprises
Table 4.4 Analysis of relation between investment and cash flow 70
Table 4.5 Impact of state ownership on investment – cash flow 73
relation
Table 4.6 Impact of state ownership on relation between investment 75
and cash flow under different growth opportunities
Table 4.7 Impact of state ownership on the investment and leverage 78
relations
Table 4.8 Impact of state ownership on the relations between 79
investment – leverage under different growth opportunities
Table 4.9 State ownership and relations between investment and cash 82
flow under different growth opportunities: GMM estimation method
Table 4.10 Classification of state-owned and non-state-owned 85
enterprises using the threshold of 33.15 percent
Table 4.11 State ownership and relations between investment and cash 88
flow under different growth opportunities in which high growth opportunity is classified by quartile
Table 5.1 Sample structure 105
Table 5.2 Variable descriptive statistic 106
Table 5.3 Pearson and Spearman correlation matrix 108
Table 5.4 Analysis of investment – cash flow relation 113
Table 5.5 Effect of banking system reform on investment – cash flow relation
117
Table 5.6 Effect of banking system reform on investment –cash flow relation of state – controlled listed companies by different growth opportunities.
120
Table 5.7 Effect of banking system reform on investment –cash flow relation of non state – controlled companies by different growth opportunities
122
| Table 5.8 | Effect of banking system reform on investment – leverage relation | 124 |
| Table 5.9 | Effect of banking system reform on investment – leverage relation for both low and high growth opportunities | 126 |
| Table 5.10 | GMM estimates of investment – cash flow sensitivity | 127 |
LIST OF FIGURES
Figure 2.1 Annual GDP growth rate for the period of 1986 – 2018 (%) 13
Figure 2.2 Vietnam’s Inflation (% change of CPI), 1986-2018 15
Figure 2.3 Progress of SOE equitization, 1992 – 2018 17
Figure 2.4 Number of SOEs, 1995 – 2017 19
Figure 5.1 Fitted value of investment (IK) on cash flow (CFK) on a full sample of Vietnamese listed firms for the period of 2009 – 2014
110
Figure 5.2 Fitted value of investment (IK) on cash flow (CFK) on a subsample of Vietnamese State controlled firms for the period of 2009 – 2014
111
Figure 5.3 Fitted value of investment (IK) on cash flow (CFK) on a subsample of Vietnamese Non – state controlled firms for the period of 2009 – 2014
112
ABSTRACT
This thesis applies the style of a series of papers in the field of corporate finance, which mainly composes of the two stand-alone essays.
The first essay investigates the effect of state ownership on the relationship between investment and cash flow in Vietnam, a small transitional economy. Using a sample of companies listed on the both Ho Chi Minh City Stock Exchanges (HOSE) and Hanoi Stock Exchange (HNX) during the period 2008 to 2015, the U- shaped investment–cash flow relations for both state-owned and non-state-owned firms are found. In addition, state-owned companies (SOEs) have higher cash flow sensitivity of investment, which perhaps is due to their socioeconomic and political responsibilities, poor corporate governance and agency problem. Their growth opportunities also affect the sensitivity.
The second essay examines the effect of banking system reform, which is defined by the presence of foreign banks, on investment-cash flow relation in a context of a small transition economy. I find evidence that the presence of foreign banks in Vietnam results in decreasing in firm’s dependence on local banks and has changed their financial constraint. Company investments are less reliant on internal cash flow in the post reform period. Although overinvestment of state controlled firms cannot be reduced but underinvestment problem of non- state -controlled listed firms is mitigated due to better accessibility to bank loans. The investigated relation between investment and leverage is robust for this conclusion.
JEL classification: G30, G31, G32
Keywords: financial constraints, investment – cash flow relations, state ownership, banking system reform, small transition economy.
Luận án này nhằm tìm hiểu ảnh hưởng của sở hữu nhà nước và cải cách hệ thống ngân hàng lên mối quan hệ giữa đầu tư và dòng tiền ở Việt nam – một nền kinh tế chuyển đổi nhỏ. Sử dụng mẫu các doanh nghiệp phi tài chính niêm yết trên các thị trường chứng khoán Việt nam trong giai đoạn 2008 – 2015, trước hết tác giả đã tìm thấy bằng chứng về về mối quan hệ chữ U giữa đầu tư và dòng tiền ở Việt nam. Ngoài ra, các doanh nghiệp nhà nước (SOEs) có độ nhạy cảm của đầu tư với dòng tiền cao hơn so với các doanh nghiệp tư nhân có lẽ bởi các trách nhiệm chính trị, kinh tế xã hội mà họ phải đảm nhiệm, cũng như cơ chế quản trị doanh nghiệp yếu kém và vấn đề đại diện ở những doanh nghiệp này.
Thứ hai, tác giả tìm thấy bằng chứng rằng sự hiện diện của các ngân hàng nước ngoài, là biến đại điện cho cải cách hệ thống ngân hàng, đã làm giảm sự phụ thuộc vào các ngân hàng nội địa của doanh nghiệp cũng như làm thay đổi tình trạng hạn chế tài chính của họ. Sau cải cách ngân hàng, đầu tư của doanh nghiệp ít phụ thuộc vào dòng tiền nội bộ hơn. Mặc dù tình trạng đầu tư quá mức của các doanh nghiệp nhà nước kiểm soát không giảm, nhưng vấn đề đầu tư dưới mức của các doanh nghiệp nhà nước không kiểm soát đã được giảm do gia tăng khả năng tiếp cận nguồn vốn từ bên ngoài. Luận án cũng tìm thấy bằng chứng củng cố kết luận này thông qua tìm hiểu mối quan hệ giữ đầu tư và tài trợ.
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