Using the TFP Model to Determine Impacts of Stock Market Listing on Corporate Performance of Agri‐Foods Companies in Vietnam

• Author: Dinh Thi Bao Linh,Junaid M. Shaikh
• DOI: http://doi.org/10.1002/jcaf.22259
• Date: 01 March 2017
• Published date: 01 March 2017

61

© 2017 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI 10.1002/jcaf.22259

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Using the TFP Model to

Determine Impacts of Stock

Market Listing on Corporate Performance

of Agri-Foods Companies in Vietnam

Junaid M. Shaikh and Dinh Thi Bao Linh

INTRODUCTION

Topic Statement

The Vietnam

economy is one of

the special economic

models in the world.

It is a “socialist-

oriented market

economy.” The coun-

try is now one of

the world’s leading

exporters of agricul-

tural products. Even

during the recent

economic crisis in

Asia and throughout

the world, the Viet-

namese economy has

seen a higher growth

rate than the regional

average level. With

many companies

in operation, the

agricultural sector

is the unique sector

maintaining a trade

surplus (in Vietnam,

only companies can

export). How can

these companies help

Vietnam to be a key

global exporter of

agricultural products

such as pepper, rice,

cashew nuts, coffee,

and catfish? Lessons

have been learned

from observing

events taking place

within the more

matured and other

developing countries.

One of the hot

topics being dis-

cussed is the role of

the private securi-

tized sector, which

is new in Vietnam

in contrast to the

traditional social-

ist point of view.

As Vietnam is now

a member of more

than 10 bilateral and

Being one of the world’s leading exporters of different

agricultural products, especially rice, pepper, and catfish,

Vietnam has a significant role to play in the agricultural-

related, economic, and geographic political issues of Asia.

The transformation from a socialist public-owned economy to

a private-equity form of ownership through the securitization

of resources will have a significant impact on the economic

well-being of Vietnam. Since the recent advances of China

and its ambition in the South China Sea, big countries like

the United States, Japan, and India have considered Vietnam

a key partner in their new Asia strategies. Along with the eco-

nomic integration and trade liberalization, Vietnam is opening

its market with 100 million consumers and also many export

opportunities to international business and investors. Is the

stock market a transparent and efficient channel for their

choice? That depends not only on the legal framework, but

also on the performance of Vietnamese companies that may

become their partners or rivals.

This article investigates the effect of stock market listing on

the corporate performance of listed food processing and agri-

cultural companies in Vietnam. Using the regression analysis

and a total factor productivity (TFP) model modified to fit the

Vietnam data, the study revealed that stock listing has a posi-

tive effect on corporate performance in Vietnam. Key findings

lead to the recommendation that the Vietnamese government

should enhance the process of privatizing state-owned enter-

prises (SOEs) and stock market listing in the foods and agri-

cultural sectors, focusing on market transparency and fairness,

securities market reform, and incentives policies dealing with

credit, tax, and land ownership. © 2017 Wiley Periodicals, Inc.

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