Government Support and Firm Profitability in Vietnam

• Authors: Thanh Minh Nguyen , Tuyen Quang Tran , Long Thanh Do

Title variants

Wsparcie rządowe a rentowność przedsiębiorstw w Wietnamie

• Languages of publication: EN

Abstracts

EN

Existing studies on the linkage between government subsidies and firm financial performance often use a mean regression approach and focus mainly on developed countries. To fill the gap, this study, for the first time, considers the impact of government support activities on the profitability of manufacturing SMEs in a developing country, Vietnam. Using an unbalanced panel dataset covering the period 2009–2015, government financial supports show an insignificant linkage with firm profitability when using OLS. However, a fixed‑effect quantile approach reveals that government financial support is negatively related for firms with low profit but is positively related for firms in the high profitability percentile. Our findings also suggest that policymakers should focus on helping start‑ups instead of ineffective, informal firms.

PL

Istniejące badania dotyczące związku między subwencjami rządowymi a wynikami finansowymi przedsiębiorstw często wykorzystują średnie podejście oparte na analizie regresji i koncentrują się głównie na krajach rozwiniętych. Aby wypełnić tę lukę, badanie to po raz pierwszy bierze pod uwagę wpływ działań wspierających rząd na opłacalność MŚP produkcyjnych w kraju rozwijającym się, jakim jest Wietnam. Wykorzystując niezbilansowany panel danych, obejmujący okres 2009–2015, wykazano, że rządowe wsparcie finansowe ma niewielki wpływ na rentowność jeśli zastosuje się zwykłą metodę najmniejszych kwadratów (OLS). Jednak metoda regresji kwantylowej z efektami stałymi pokazuje, że wsparcie finansowe ma negatywny wpływ na rentowność w przypadku firm o niskich zyskach, ale wpływa pozytywnie w przypadku firm o wysokim percentylu rentowności. Wyniki przeprowadzonych badań sugerują również, że decydenci powinni skupić się na wspieraniu start‑upów, a nie nieefektywnych firm niezarejestrowanych.

Keywords

EN

government support; profitability; quantile approach; SMEs

PL

wsparcie rządowe; rentowność; metoda regresji kwantylowej; MŚP; wsparcie rządowe; rentowność; metoda regresji kwantylowej; MŚP

• Publisher: Uniwersytet Łódzki. Wydawnictwo Uniwersytetu Łódzkiego
• Journal: Comparative Economic Research. Central and Eastern Europe
• Year: 2018
• Volume: 21
• Issue: 4
• Pages: 105-120

Dates

published

2018-12-10

Contributors

author

Thanh Minh Nguyen

• Ph.D., Faculty of Accounting, Academy of Finance; Hanoi, Vietnam

author

Tuyen Quang Tran

• Ph.D., Center for Data and Socio‑Economic Analysis, University of Economics and Business, Vietnam National University, Hanoi, Vietnam

author

Long Thanh Do

• The Office of National Science and Technology Programs, Ministry of Science and Technology, Hanoi, Vietnam

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Identifiers

DOI

10.2478/cer-2018-0029