How much state ownership do hybrid firms need for better performance?

Nguyen, Bach, Do, Hoa and Le, Chau (2021) How much state ownership do hybrid firms need for better performance? Small Business Economics . ISSN 0921-898X

Full content URL: https://doi.org/10.1007/s11187-021-00556-8

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How much state ownership do hybrid firms need for better performance?
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Abstract

Hybrid ownership—sharing partial business ownership with the state—is a new form of political connections that entrepreneurs in developing countries may employ to improve their access to key resources. This study investigates hybrid ownership as a strategic decision of entrepreneurs running small businesses in Vietnam—a transition economy. Utilising the resource dependence theory and legitimacy viewpoint, we propose and evidently show that increased state ownership in hybrid firms leads to improved performance. However, increasing state ownership beyond a minority share threshold harms firm performance due to the presence of agency costs. Also, the involvement of the state in firm governance reduces the benefits gained from having state ownership.

Keywords:Hybrid firms, Political connections, Firm performance, Weak institutions, Vietnam
Subjects:N Business and Administrative studies > N300 Finance
N Business and Administrative studies > N120 International Business studies
Divisions:Lincoln International Business School
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ID Code:47122
Deposited On:08 Nov 2021 11:38

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