Capital diversion in Vietnamese state-owned enterprises

Cuong Le-Van (), Ngoc-Anh Nguyen, Ngoc-Minh Nguyen and Phu Nguyen-Van

Post-Print from HAL

Abstract: Purpose The authors estimated the hidden overhead (capital diversion or wasteful use of capital) of Vietnam state-owned enterprises (SOEs). Design/methodology/approach The authors used a panel data set of 10,200 Vietnam SOEs observed over the period 2010–2018. The authors modeled and estimated the hidden overhead by using a stochastic production frontier. The hidden overhead parameter is modelled as the technical inefficiency in the production function. Findings Vietnam SOEs are very capital intensive. The hidden overhead (or the wasteful use of capital) is very high with an average rate of 69%. Research limitations/implications Alternative estimation methods should be used to account for endogeneity in production inputs. Lack of comparison with the Vietnam private firms. Originality/value The paper proposes an original way to quantify hidden overhead (or capital diversion) in the Vietnam SOEs. The finding (a capital diversion rate of 69% on average) is astonishing. It calls for an urgent and profound reform of the Vietnam SOEs.

Date: 2023-11-14
New Economics Papers: this item is included in nep-eff, nep-sea and nep-tra
Note: View the original document on HAL open archive server: https://hal.science/hal-04384629v1
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in Fulbright Review of Economics and Policy, 2023, 3 (2), pp.221-229. ⟨10.1108/FREP-05-2023-0019⟩

Downloads: (external link)
https://hal.science/hal-04384629v1/document (application/pdf)

Related works:
Working Paper: Capital diversion in Vietnamese state-owned enterprises (2023)
Working Paper: Capital diversion in Vietnamese state-owned enterprises (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04384629

DOI: 10.1108/FREP-05-2023-0019

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().