Corporate investment- foreign ownership relationship and the role of leverage: the case of Vietnam
This paper aims to investigate the relationship between corporate investment and foreign ownership, taking into account the indebtedness of firms. Using a sample of 669 Vietnamese quoted firms from 2010 to 2021, the System Generalized Method of Moments (i.e., system-GMM) is employed to investigate t...
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| Format: | Article |
| Language: | English |
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The University of Danang
2024-11-01
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| Series: | Tạp chí Khoa học và Công nghệ |
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| Online Access: | https://jst-ud.vn/jst-ud/article/view/9395 |
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| _version_ | 1850206757779931136 |
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| author | Thái Thị Hồng Ân |
| author_facet | Thái Thị Hồng Ân |
| author_sort | Thái Thị Hồng Ân |
| collection | DOAJ |
| description | This paper aims to investigate the relationship between corporate investment and foreign ownership, taking into account the indebtedness of firms. Using a sample of 669 Vietnamese quoted firms from 2010 to 2021, the System Generalized Method of Moments (i.e., system-GMM) is employed to investigate the relationship between investment and foreign ownership. The paper finds that foreign shareholding reduces corporate investment, and this influence is more pronounced in highly leveraged firms. The outcome suggests that in emerging markets like Vietnam, foreign investors focus on short-term returns so that, long-term investment is cut back to save resources for earnings pushing, leading to the so-called “under-investment problem”. In the context of high debt levels, besides ensuring short-term profitability, firms have to prioritize debt repayment, making the tendency stronger. |
| format | Article |
| id | doaj-art-4443418ebd264d2491ea8672eed765c0 |
| institution | OA Journals |
| issn | 1859-1531 |
| language | English |
| publishDate | 2024-11-01 |
| publisher | The University of Danang |
| record_format | Article |
| series | Tạp chí Khoa học và Công nghệ |
| spelling | doaj-art-4443418ebd264d2491ea8672eed765c02025-08-20T02:10:42ZengThe University of DanangTạp chí Khoa học và Công nghệ1859-15312024-11-0165699389Corporate investment- foreign ownership relationship and the role of leverage: the case of VietnamThái Thị Hồng Ân0The University of Danang - University of Economics, VietnamThis paper aims to investigate the relationship between corporate investment and foreign ownership, taking into account the indebtedness of firms. Using a sample of 669 Vietnamese quoted firms from 2010 to 2021, the System Generalized Method of Moments (i.e., system-GMM) is employed to investigate the relationship between investment and foreign ownership. The paper finds that foreign shareholding reduces corporate investment, and this influence is more pronounced in highly leveraged firms. The outcome suggests that in emerging markets like Vietnam, foreign investors focus on short-term returns so that, long-term investment is cut back to save resources for earnings pushing, leading to the so-called “under-investment problem”. In the context of high debt levels, besides ensuring short-term profitability, firms have to prioritize debt repayment, making the tendency stronger.https://jst-ud.vn/jst-ud/article/view/9395financial constraintsforeign ownershipinvestmentleveragevietnam |
| spellingShingle | Thái Thị Hồng Ân Corporate investment- foreign ownership relationship and the role of leverage: the case of Vietnam Tạp chí Khoa học và Công nghệ financial constraints foreign ownership investment leverage vietnam |
| title | Corporate investment- foreign ownership relationship and the role of leverage: the case of Vietnam |
| title_full | Corporate investment- foreign ownership relationship and the role of leverage: the case of Vietnam |
| title_fullStr | Corporate investment- foreign ownership relationship and the role of leverage: the case of Vietnam |
| title_full_unstemmed | Corporate investment- foreign ownership relationship and the role of leverage: the case of Vietnam |
| title_short | Corporate investment- foreign ownership relationship and the role of leverage: the case of Vietnam |
| title_sort | corporate investment foreign ownership relationship and the role of leverage the case of vietnam |
| topic | financial constraints foreign ownership investment leverage vietnam |
| url | https://jst-ud.vn/jst-ud/article/view/9395 |
| work_keys_str_mv | AT thaithihongan corporateinvestmentforeignownershiprelationshipandtheroleofleveragethecaseofvietnam |