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Title: The political economy of Vietnam : the evolution of state-business relationships
Author: Lee, Woo Cheol
ISNI:       0000 0004 6061 5293
Awarding Body: SOAS, University of London
Current Institution: SOAS, University of London
Date of Award: 2015
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While many Vietnam studies mention that state-owned enterprises (SOEs) in Vietnam face soft budget constraints, a limited amount of studies actually focus on this issue. Most of them are based on the analysis of macro level data and few are firm level analyses such as Tenev et al. (2003) and Gainsborough (2005) which contain both private firms and SOEs in the data set and compare SOEs with private firms in terms of budget constraints. Despite their insightfulness, details of budget constraints among SOEs remain unanswered. To fill this gap, this dissertation analyses the data collected from returned questionnaires from and conducted interviews with 22 local and central SOEs including five equitised SOEs in Hai Phong in 2005. Contrary to the conventional claim, this dissertation finds that the budget constraints on SOEs in Hai Phong have tended to be hardened since the late 1990s and also some large SOEs face softer budget constraints than small SOEs do. This dissertation explains these findings in terms of state-business relations. Firstly, the hardened budget constraints on SOEs can be explained by the strategy of the state to reduce the number of SOEs and to form big SOEs, which this dissertation calls divestiture and concentration. Secondly, given the importance of Gainsborough's argument that connections of SOE directors with politicians and bankers decide the softness of budget constraints, this dissertation argues that the softer budget constraint on large SOEs is the outcome of the rational choice of the state whose political priority is to keep the dominance of the state sector in the socialist-oriented market economy. By providing financial support to loss-making SOEs, the state will obtain political gain in exchange of financial burdens. Given its budget constraint, the state tends to support large SOEs to maximise its political gain.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral