The effect of foreign ownership on firms’ performance : evidence from emerging Vietnam market

• Main Authors: Tanaja, Cheryl, Bach, Ngoc Van, Nguyen, Ngoc My Nhi
• Other Authors: Liu Wei-Lin
• Format: Final Year Project
• Language: English
• Published: 2011
• Subjects: DRNTU::Social sciences::Economic development::Vietnam
• Online Access: http://hdl.handle.net/10356/43922
• Institution: Nanyang Technological University

With globalization on the rise and emerging countries being the most attractive destinations for Foreign Direct Investment, it is becoming increasingly important to study the influence of such capital inflows on firm performance in these countries. This study takes into account 202 Vietnamese firms with data from the period 2007-2009 to examine the effect of foreign ownership on the firms’ performance, using Return on Assets as the internal indicator and Market to Book Value Ratio as the external indicator. The results from the regressions of firm performance against the level of foreign ownership suggest a positive influence of foreign ownership on Return on Assets. However, due to the special market conditions of the period 2007-2009, Market to Book Value ratio proved to be an unreliable measure of firm performance from the market’s point of view.