POLITICAL CONNECTIONS and FIRM PERFORMANCE: EVIDENCE FROM VIETNAMESE SMES

Q3 Business, Management and Accounting Journal of Small Business Strategy Pub Date : 2024-05-14 DOI:10.53703/001c.94173

T. Q. Ngo, Thuy Thi Viet Ha

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Abstract

The current paper investigates the role of political connections in firm performance under various conditions of market competition and institutions in Vietnam. By employing a three-year panel-data survey from 500 small and medium-sized enterprises and a fixed-effects model controlled for unobserved invariants, estimation results show that political connections with servants positively affect the performance of their firms when firm and industry effects and endogeneity of political connections are controlled. We also find that the positive impacts of political connections on firm performance vary with market competition, as in the case of Vietnam. We further find that political connections are significantly negative to firm performance in the conditions of weak market institutions in the case of Vietnam (the first stage of the institutional political connection hypothesis). In addition, there are no different institutional effects on firm performance between stages of the institution. Policies related to institutional development and corporate governance are recommended to foster firm performance and positive side-effects of political connections.

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政治联系与公司业绩：越南中小企业的证据

本文研究了在越南各种市场竞争和制度条件下，政治关系对企业绩效的影响。通过对 500 家中小型企业进行为期三年的面板数据调查，并采用固定效应模型对非观测变量进行控制，估计结果表明，在控制了企业和行业效应以及政治关系的内生性之后，与公务员的政治关系会对企业绩效产生积极影响。我们还发现，政治关系对企业绩效的积极影响因市场竞争而异，越南的情况就是如此。我们进一步发现，在越南的案例中，在市场制度薄弱的条件下，政治联系对企业绩效有显著的负面影响（制度性政治联系假说的第一阶段）。此外，不同阶段的制度对企业绩效的影响也不尽相同。建议制定与制度发展和公司治理相关的政策，以促进企业绩效和政治联系的积极副作用。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Small Business Strategy Business, Management and Accounting-Strategy and Management

CiteScore

3.60

自引率

0.00%

发文量

审稿时长

4 weeks

期刊介绍： The Journal of Small Business Strategy is an applied research journal. Manuscripts should be written with the small business/entrepreneurship educator, small business consultant in mind. Both conceptual and empirically-based papers are encouraged, but they must have an applied focus. All papers must have a significant literature review, be properly documented, with citations from research-based works rather than popular press or web sites. Since JSBS is an applied research journal, each article should include a substantial "Discussion and Implications" section that details how the research findings are relevant for the journal''s readers. Authors are discouraged from submitting manuscripts with extremely complex statistical analyses and/or a purely theoretical orientation. Case studies are acceptable if they contribute substantial to the understanding of small business strategy and include a significantly to the understanding of small business strategy and include a significant literature review that underscores the issues in the case. We do not accept teaching or pedagogical cases.