STATE OWNED ENTERPRISES AND EQUITIZATION IN VIETNAM

Fredrik Sjöholm

No 228, EIJS Working Paper Series from Stockholm School of Economics, The European Institute of Japanese Studies

Abstract: Equitization (privatization) has been at the core of the policy debate in Vietnam over the last decade but the government’s attitude seems ambivalent. On the one hand, equitization is emphasized in policy statements. On the other, the progress on equitization has been relatively modest and SOEs continue to dominate the Vietnamese economy. This paper examines SOEs and the equitization process in Vietnam. We compare the development with guidelines from economic theory and with lessons from privatization programs in other countries. Equitization in Vietnam is found to target small SOEs and no larger ones, and it does not address the efficiency problem with state ownership since the state typically remains a controlling share of the equitized SOEs. Moreover, economic theory and experience from other countries suggest that the Vietnamese approach with diffused ownership in SOEs and in equitized firms; equitization to employees and management; and little participation of strategic investors, might not be the most efficient approach to public ownership and to equitization. We argue in this paper that Vietnam still has an opportunity to change its approach towards SOEs and equitization and thereby secure increased efficiency and economic growth.

Keywords: State Owned Enterprises; Privatization; Equitization; Vietnam (search for similar items in EconPapers)
JEL-codes: L32 P21 P31 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2006-08-01
New Economics Papers: this item is included in nep-dev, nep-pbe, nep-sea and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published in Vietnam after 20 years of Doi Moi, Kokko, Ari (eds.), 2007, chapter 2, UNDP.

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:eijswp:0228

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