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.

Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School
PURE Output Type: Article
Published Date: 2021-08-18
Accepted Date: 2021-08-18
Authors: Nguyen, Bach (ORCID Profile 0000-0003-1527-7443)
Do, Hoa
Le, Chau

Download

[img]

Version: Accepted Version

Access Restriction: Restricted to Repository staff only until 1 January 2050.


Export / Share Citation


Statistics

Additional statistics for this record