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Reform of State-Owned Enterprises in Viet Nam to Increase Performance and Profit

Publication | September 2019
Reform of State-Owned Enterprises in Viet Nam to Increase Performance and Profit

Due to misallocation of resources and inefficiencies, state-owned enterprises continue to pose a challenge to the economy of Viet Nam.

In Viet Nam in recent years the reform of state-owned enterprises (SOEs) to improve their performance has become an essential mission in the context of international economic integration. It also represents the commitment of the Viet Nam government to renovate economic institutions as well as construct a market-oriented economy. We examine SOE reforms in Viet Nam and find that net revenue positively affects the SOEs' profit before taxes, while sales expenses exert a negative impact on profit before taxes. We recommend policies to the government to enhance SOE performance and foster the achievement of reforms, including the enhancement of the roles of the state in SOEs, the transparency procedure of the reform, the improvement of the government’s control and inspection in the equitization and divestment of SOEs, the selection of appropriate methods for equitization and divestment, the exact assessment of SOEs’ value, and the consideration of the particular characteristics of different sectors.

WORKING PAPER NO: 999