The Government Intervention And Investment Decision: Evidence From Vietnam

Abstract

This paper investigates whether the government intervention affects the investment decision and the efficiency in investment allocation amongst Vietnamese listed firms for the period from 2009 to 2016. The regression coefficients are estimated by two-step system GMM regressions. The research results show that government intervention is positively related to investment but could lead to inefficiency in capital allocation. Political connection is significantly associated with investment decision and investment efficiency of non-SOEs; however, it is insignificant for those of SOEs.