Xem xét tác Động của cơ cấu sở hữu công ty Đến Định giá thị trường dẫn chứng từ thị trường việt nam trong thời kỳ covid 19

This research investigated the effects of ownership structure on the market valuation of listed companies in the Vietnamese market during the Covid-19 pandemic.. The researcher used the

VIETNAM NATIONAL UNIVERSITY, HANOI

UNIVERSITY OF LANGUAGES AND INTERNATIONAL STUDIES FACULTY OF ENGLISH LANGUAGE TEACHER EDUCATION

ĐẠI HỌC QUỐC GIA HÀ NỘI

TRƯỜNG ĐẠI HỌC NGOẠI NGỪ

KHOA SU PHAM TIENG ANH

KHOA LUAN TOT NGHIEP

XEM XÉT TÁC ĐỘNG CỦA CƠ CẤU SỞ HỮU

CÔNG TY ĐẾN ĐỊNH GIÁ THỊ TRƯỞNG:

DẪN CHỨNG TỪ THỊ TRƯỜNG VIỆT NAM TRONG THỜI KỲ COVID 19

Giáo viên hướng dẫn: TS Đào Thị Tuyết Nhung

Khóa: QH2019.F1.E12

1.1 Background of the study

1.2 Scope of the study

1.3 Research aims and research questions

This research investigated the effects of ownership structure on the market valuation of listed companies in the Vietnamese market during the Covid-19 pandemic The research focused on the structure of ownership and uses data from the financial website Vietstock for the period from 2005 to 2021 using the regression method A total of 687 firms were collected The researcher used the dummy variable of the ratio based on Tobin's Q ratio to perform the OLS linear regression model and the probit model to give similar results when adding a dummy variable of Covid-19 to consider and compare the impact of ownership structure on market valuation According to what has been analyzed, it is found that concentration ownership and the foreign institution had a positive impact on the market value in the period; however; state ownership was effective in the Covid-19 period Keywords: Ownership structure, market valuation, Covid - 19, Tobin’s

Q, stock exchanges

Acceptance page

I hereby state that I: Pham Thu Huy’&, Class QH2019.E12, being a candidate for the degree

of Bachelor of Languages accept the requirements of the College relating to the retention and use of Bachelor’s Graduation Paper deposited in the library

In terms of these conditions, I agree that the origin of my paper deposited in the library should be accessible for the purposes of study and research, in accordance with the normal conditions established by the librarian for the care, loan, or reproduction of the paper

Ha Noi, March Sth, 2023

Phạm Thu Huy

Acknowledgments The topic "Considering the impact of firm’s ownership structure on market value: evidence from the Vietnam market in the period of covid 19" is the content that I have researched and made my graduation thesis after studying at the Faculty of English Language Teacher Education, University of Languages and International Studies In the process of researching and completing the thesis, I received much attention and help from

my supervisor For the success of this thesis, I would like to express my sincere thanks to: The faculty of English Language Teacher Education at, the University of Languages and International Studies has created a very good learning and training environment, providing me with useful knowledge and skills to help me apply and facilitate the thesis Supervisor PhD.Dao Thi Tuyét Nhung is really enthusiastic and dedicated to guiding and helping me during the research and implementation of the topic She gave me useful suggestions to complete this research thesis well

I would also like to thank the School's Board of Directors and teachers for giving

me the opportunity to gain practical knowledge and experience to have pragmatic information for the thesis

iil

factors affecting Tobin’s Q

Tobin’s Q

factors affecting Tobin’s Q in the period of Covid-19

7 | Table 4.4: Probit model considers ownership factors affecting Tobin’s Q in the period of Covid 19 17

14 CIP Change in price

CHAPTER 1: INTRODUCTION 1.1 Background of the study

Great crises, including economic, political, and biological, all give negative impacts on individuals, businesses, and societies due to the sheer scale and complexity that have affected different aspects of life The outbreak of the Covid-19 pandemic has caused an economic and social crisis in many places When the Coronavirus was discovered and spread, starting in China and then to other countries around the globe,

it had a profound effect on the global economy in general, and Vietnam in particular Joint stock companies are companies whose share capital is owned by shareholders, thereby creating the company ownership structure Studies on the effect

of ownership structure on a firm's market price are essential research topics Ownership structure plays an important role in decisions as well as the value of firms (Jiang and Kim, 2020; Kyere and Ausloos, 2021) Cornett et al (2007 &2008) pointed out that institutional ownership recorded a positive impact due to their experiences in the financial market, and management, which leads to the fact that observation

relationship in a short term (Wahal, 1996) Meanwhile, an irrelevant one was found in the research of Duggal & Millar (1999)

Studies on ownership structure in developing countries almost always include state ownership, especially in Southeast Asian countries This factor is characterized

by a high rate of state ownership, showing the control of state organizations in many different directions According to the investigation conducted by Le Duc Hoang (2015), Xu and Xang (1999) have highlighted that the state factor has a negative influence on the performance of enterprises

Furthermore, The Covid 19 pandemic has caused notable anxiety for investors, and the author believes that the difference in ownership structure makes investors

stateowned companies are more attractive and safer during the Covid epidemic To answer that question, I chose the topic: “Considering the impact of firm’s ownership structure on market value: Evidence from the Vietnam market in the period of Covid-19.”

1.2 Scope of the study

The study clarifies the influence of the ownership structure of companies listed

on the Ho Chi Minh and Hanoi stock exchanges on their market valuation, especially during the Covid-19 period, in the 16-year period from 2005 to 2021 Specifically, analyzing the ratio of state ownership, foreign ownership, domestic and foreign ownership, CEO ownership, and ownership concentration on the efficiency of the business as well as determining the market price In addition, this study will propose recommendations on ownership structure to optimize profit efficiency and market valuation

1.3 Research aims and research questions

This research may help to systematize the theoretical basis, and the results of research in the world as well as in the country on ownership structure and market value

of firms, enriching academic treasures on this topic in Vietnam Furthermore, in the terms of practicality, the topic helps determine the impact of the structure ownership structure on the market valuation and provides current economic policy implications for companies, governments, and owners that may be related

To accomplish the purpose of this study, it is a need to answer the following research questions:

(1) Does ownership structure affect a company's market valuation?

(2) Consider the effect of ownership structure on market valuation during the Covid19

(3) To what extent does structure affect market valuation? How do the proportions of state ownership, foreign ownership, domestic and foreign

ownership organization, CEO ownership, and concentrated ownership affect the market valuation of enterprises?

1.4 Organization

The investigation of the impact of ownership structure includes 5 chapters In the first chapter, the author suggested the background of the study, the research aims, the research questions, and the research scope The definitions of some key concepts and previous research were mentioned in the next section Before giving the results and discussion, the sampling, and the way to collect data were elaborated on in Chapter 3 The study culminated with the conclusion part, which also includes limitations when conducting this topic

CHAPTER 2: LITERATURE REVIEW

In this section, the author reviewed the pertinent literature related to ownership structure, market value, and Covid 19 for further research

2.1 Ownership structure

The ownership structure is the most crucial structure in a business, playing a key role in making decisions and rewards It represents cooperation among shareholders and focuses on making decisions based on the proportion of votes and invested capital M Kyere and M Ausloos (2021), claimed that ownership structure

is crucial to company management The ownership structure includes both individual shareholders and institutional shareholders The prior study by Jirasakuldech and associations (2010) emphasized the relevance of institutional ownership in evaluating the company’s market valuation and safeguarding investors Huge investors often focus on observing and increasing the value of all stocks The presence of major shareholders also improves the efficiency of the market for corporate control There are many ways to divide the ownership structure, which can be divided according to the structure of major shareholders (shareholders holding more than 5% of shares) or owners (Nguyen Thi Hieu, 2016)

There are six types of ownership structures in Viet Nam The first is state ownership, which is a type of ownership in which the State is the owner of the property listed in Point 17 of the 1992 Constitution and serves as the people's agent to control and own the means of production The second one is concentration ownership, whose shareholders are more than 5% Concentrated ownership has both advantages and disadvantages In terms of enhanced oversight of senior management, it may lower agency expenses; however; may also offer powerful personal benefits of control (Caspar Rose, 2019) Besides, there also existed foreign, and domestic organizations They are shares owned by foreigners and national investors, respectively Similarly, foreign and domestic individuals are also two remaining types of ownership

According to the master Nguyen Van Duong (2022), market value is the term used to describe the value of an asset or a company in the financial market, according to market participants It is often used to refer to the market capitalization of a company

As the author mentioned above, market valuation is determined by many factors, however, there has been no research on the effect of ownership structure on market valuation using only Tobin's Q index

In this study, the author used Tobin’s Q ratio to define market value

Market value+Total debt Total assets

Tobin’s Q=

2.3 Evidence of the impact of ownership structure on market value

As presented in the previous section, there have been many studies on the influence of ownership structure on the market valuation of enterprises; however; the results are still different, specifically mentioned below

The beginning of the series of studies is a study by Jansen and Meckling (1976),

it was found that ownership structure showed that the important variable in capital structure is not only determined by debt and equity but also by the ratio of state ownership and institutional ownership Another interesting study is the one by Shelters A and Vishny W (1987), which also gave similar results that Tobin's Q first increased, then decreased, and finally slightly increased as board ownership increases Kwangwoo Park (2001) examined the connection between the Tobin ratio and foreign ownership structure in the article on State ownership and the value of firms The findings revealed a favorable association between firm value and foreign ownership

in the shape of a non-linear curve It is discovered that a firm's valuation positively impacts the firm's Tobin-Q, and these findings are in line with those of Villalonga et

al (2006) Along with that correlation, a study conducted in Kenya pointed out that foreign ownership, company ownership, and manager ownership were found to have

a significantly positive relationship, associated with firm performance (Ongore,

impact on firm value Mehrani.S et al (2013) claimed that the relationship between state ownership, organizations, individuals, and the value of the company was a positive relationship each other Research on the link between an organization's capital ownership and value was also done by Vo Xuan Vinh in 2014 According to the findings, businesses with a high organizational ownership level also have a high level

of operational effectiveness and a high level of enterprise value But in general, the above studies, although using different models, all have the same result that some types of ownership structure had a positive effect on the market valuation of enterprises

Although there are many studies with a positive effect of ownership structure, there were still others that suggested ownership structure gave negative impacts on market valuation Morck et al (1988) used cross-regression methods with data from

371 Fortune 500 companies in 1980, indicating that when the ownership ratio of members of the Board of Directors had termites a linear relationship with operational efficiency, measured by the target Tobin’s Q McConnell and Serves (1990), McConnell and Serves (1995) had pointed out the opposite U -shaped and statistical relationship between Tobin’s Q and internal ownership ratio Experimental research

by Beni Lautterbach and Alexander Vaninsky (1999) Distinguish between family companies, companies controlled by the cooperation of individuals, company control companies, and companies that large shareholders had more than 50% of voting rights

in Israeli, discovered that the companies that managers are both the owner are less effective in generating net income compared to the companies managed by others professional - no possession State ownership was seen to have a detrimental impact

on a firm's performance, according to research by Maria Maher and Thomas Andersson (1999) Investigations of the effect of state ownership on firm performance

by Zheng et al (1998), Xu and Wang (1999), Zhang et al (2001), Li and Wu (2002), Sun and Tong (2003), and Tian (2002) usually found a negative effect Lins investigated a panel of 1433 firms from 18 emerging economies in 2002 to determine the relationship between non-management shareholders and company value In terms

of the company's profitability evaluation of Tobin's Q, his conclusions were optimistic His research showed that substantial non-management block holders can reduce the value discounts associated with projected agency difficulties Wei & Varela (2003) found that ownership was unlikely to improve firm performance Konijin et al (2011) have shown the results that concentration ownership had a pessimistic effect

on the business performance of enterprises Priya, P.V., Shanmughan, R investigated the effect of foreign ownership, on performance using the Q-Tobin method for performance variables, this research pointed out that foreign ownership has negatively impacted on Q index In Vietnam, research by Pham Nguyen Hong Thai (2013) used data on two stock exchanges HOSE and HNX to show that the state factor had no impact on company value

In summary, previous antecedent studies have not provided consistent results

on the relationship between ownership structure and market valuation Moreover, they have not yet reviewed the relationship between that relationship over a long period, especially in the context of Covid-19 Therefore, the author’s study once again examines the relationship between ownership structure and market valuation in the Vietnamese market to see if the results are the same or different from previous ones

In particular, the author emphasizes the period of the Covid 19 epidemic, a point that

is very different from previous studies In fact, the market may be affected by risks, impacting the economy, and leading to other effects on ownership structure on market valuation Although the Covid-19 pandemic has passed, this is the post-Covid era, however, I want to analyze the change in market valuation in particular, from which there may be lessons and experiences in similar situations, epidemics, and crises in the future

3.1 Sampling

In this research, the author used Tobin’s Q as the dependent variable to measure the market value

Market value = Common Share Outstanding * Share price

Furthermore, there are some types of independent variables such as ownership structure variables and controlling ones

The author determined the market valuation by using Tobin’s Q index based

on the model of Malihe Rostami (2015) At its simplest level, Tobin’s Q indicates the relationship between market valuation and a company’s intrinsic value In this research, the author used 2 dummy variables such as Tobin’s Q and Covid-19, these two variables took the value 0 or 1 For the dummy variable, Tobin’s Q took the value

1 when Tobin’s Q > 1, and took the value 0 when Tobin’s Q < 1 Similarly, in the Covid-19 dummy variable, the years with Covid (in 2020, and 2021) received a value

of 1, and the years without Covid received a value of 0

Variable Sign Measure

Dependent variable Tobin’s Q Q

Market v Todi? ‘otal debt Tobin's Q

Change in price CIP

Share price(n+1)—Share price n

ẤT ——

Share price n

Return on total assets ROA

ROA Net income

Total assets