How Much State Ownership Do Hybrid Firms Need for Better Performance?

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.

Publication DOI: https://doi.org/10.1007/s11187-021-00556-8
Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School > Centre for Personal Financial Wellbeing
College of Business and Social Sciences > Aston Business School
College of Business and Social Sciences > Aston Business School > Work & Organisational Psychology
Additional Information: This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.
Uncontrolled Keywords: D02,Firm performance,Hybrid firms,M13,P23,Political connections,Vietnam,Weak institutions,Business, Management and Accounting(all),Economics and Econometrics
Publication ISSN: 1573-0913
Last Modified: 14 May 2024 07:27
Date Deposited: 27 Aug 2021 15:24
Full Text Link:
Related URLs: https://link.sp ... 187-021-00556-8 (Publisher URL)
http://www.scop ... tnerID=8YFLogxK (Scopus URL)
PURE Output Type: Article
Published Date: 2021-10-28
Published Online Date: 2021-10-28
Accepted Date: 2021-08-18
Authors: Nguyen, Bach (ORCID Profile 0000-0003-1527-7443)
Do, Hoa (ORCID Profile 0000-0001-5442-507X)
Le, Chau

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