State management of enterprise equitization in Hanoi city

INTRODUCTION

1. Reason for choosing the topic

Along with the whole country, Hanoi city has been innovating and restructuring its affiliated SOEs. In order to find a model of State management suitable to local characteristics, it is necessary to conduct in-depth and systematic research on the State management mechanism on equitization to identify shortcomings and difficulties. From there, a more effective management model can be found, which demonstrates the urgency of the thesis topic.

1.1. About theory

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Equitization of state-owned enterprises is a fundamental content of the work of arranging and innovating state-owned enterprises. Equitization will diversify ownership of state-owned enterprise assets, affecting production relations in all three aspects: ownership of means of production, management rights, and product distribution rights. This is a fundamental content in economics that many scholars are interested in researching.

Due to the transition from managing enterprises with only one owner (the State) to managing enterprises with multiple owners (shareholders), it is necessary to strengthen scientific research on the State's management role in equitization.

The change in ownership form when equitizing state-owned enterprises, in which the right to distribute products is changed to the principle of distribution according to labor of economics in the conditions of a socialist-oriented market economy in Vietnam, raises the issue of needing in-depth research on this process.

1.2. In practice

The process of equitization of state-owned enterprises has been implemented by our Party and State for decades. The State has issued many legal documents and applied measures to implement equitization, but the implementation is still slow, with many confusions and shortcomings.

The goal of the equitization is to innovate state-owned enterprises and promote the country's economic development, which raises the need to solve this problem in practice.

The capital is the brain, the political-economic-cultural center of the whole country, the study of the equitization process of State-owned enterprises of the City will contribute to providing solutions.

Overall, accelerate the equitization process and improve State management of equitization of SOEs nationwide.

There have been a few domestic topics that have mentioned the equitization of SOEs of some central ministries and branches, but they have only focused on building a methodology and aiming to perfect the system of documents, policies and regimes of the State. Up to now, there has been no scientific work that has comprehensively and systematically researched the state management of the equitization of SOEs in Hanoi city.

From the above necessity, the researcher has carried out a research topic entitled: "State management of enterprise equitization in Hanoi city".

2. Research purpose and tasks

2.1. Purpose

The purpose of the thesis is to clarify the theoretical framework of State management of equitization of state-owned enterprises; the current state of State management of equitization of state-owned enterprises under Hanoi city and propose solutions to improve State management of equitization of state-owned enterprises in the future.

2.2. Tasks

Building a theoretical framework for research on equitization of state-owned enterprises in Hanoi city.

Analyze the current state management of equitization of state-owned enterprises in Hanoi city, point out the achievements, limitations and causes of those limitations.

Develop viewpoints, orientations, and solutions to contribute to promoting equitization and perfecting state management of equitization of state-owned enterprises in Hanoi.

3. Research object and scope

3.1. Research subjects and objects

Research object: Systematizing the theory and scientific management content for the equitization process and state management of equitization of enterprises in Hanoi city.

Research object: The equitization process of state-owned enterprises established and managed by Hanoi city.

3.2. Scope of research

Content: Research on the equitization process and state management of equitization of state-owned enterprises established and managed by Hanoi city.

In terms of space: research on the equitization process and State management of equitization for SOEs established and managed by Hanoi city (not researching central SOEs headquartered in Hanoi city and other types of enterprises established under the joint stock company model).

Regarding time: study the equitization of state-owned enterprises in the city from 1991 to present (when the whole country started to implement equitization) to have a comprehensive assessment of the equitization process of state-owned enterprises and plans for the coming years, associated with the process of innovation and integration in the industrialization and modernization of the national economy.

Research location:

National Library, Central Economic Committee, Ho Chi Minh National Academy of Politics, Central Institute for Economic Management, Hanoi Institute for Socio-Economic Research, National Academy of Public Administration, National Economics University, Academy of Finance, Banking Academy, Foreign Trade University.

Central Steering Committee for Enterprise Innovation and Development, Department of Enterprise Finance (Ministry of Finance), Department of Enterprise Development (Ministry of Planning and Investment), Vietnam Chamber of Commerce and Industry, Department of Enterprise Finance (Hanoi Department of Finance), Party Committee of Hanoi City Enterprises, departments and branches: Planning and Investment, Office of the City People's Committee, Industry and Trade, Labor, Invalids and Social Affairs, Tax, Home Affairs.

State corporations, single-member LLCs, and joint stock companies (from equitization of state-owned enterprises) are established and managed by the Hanoi People's Committee.

Consulting with scientists and managers working at Nhan Dan Newspaper, National Academy of Public Administration, Academy of Finance, University of Business and Technology, Government Office, Department of Corporate Finance, State Capital Investment Corporation, Hanoi Institute for Socio-Economic Development Research, Department of Finance.

4. Methodology and research methods

On the basis of Marxism-Leninism, Ho Chi Minh's thought, viewpoints and guidelines of the Party and State, the thesis uses main methods to

Research such as: dialectical materialism, historical materialism, synthetic analysis, logic, contrast, comparison, practical testing, scientific inheritance, interviews, including:

Synthesis method: systematize data and documents to serve the construction of theoretical basis, contributing to the analysis of the current state management of equitization. Identify policies, strategies and solutions to effectively implement state management of equitization of state-owned enterprises.

Experimental method: synthesizing information through observation and practical testing from agencies, units and enterprises to collect information to evaluate factors affecting the equitization process of state-owned enterprises under Hanoi city.

Scientific inheritance method: synthesize and analyze previous scientific research results to refer to, explore content and draw conclusions about problem solving methods.

Comparative and analytical method: in order to have objective comments, in addition to comparing and analyzing the equitization process from the beginning to the present; the thesis also analyzes data and compares the equitization process in our country with some countries in the world.

Method of collecting expert opinions: conducting direct interviews with experts, scientists, and managers to synthesize opinions in the field of equitization of state-owned enterprises in order to contribute to a clearer and more complete identification of the current situation and causes of the slow progress of equitization of state-owned enterprises in the City.

In addition, the thesis also uses domestic and foreign research results and published documents related to the topic.

5. Scientific hypothesis and research questions

5.1. Scientific hypothesis

The quantity and quality of equitization of SOEs in Hanoi have not met the requirements due to the lack of effective state management measures suitable to the characteristics of Hanoi. Therefore, if state management measures suitable to local characteristics can be proposed and designed, it can help improve the quality of equitization of SOEs in Hanoi in the coming time.

5.2. Research questions

Firstly, the concept of State management of equitization of State-owned enterprises? Why is it necessary to improve State management of equitization of State-owned enterprises in Hanoi?

Second, what are the contents of State management of equitization of State-owned enterprises in Hanoi? What results have been achieved, limitations and causes?

Third, What are the criteria for evaluating the results of State management of equitization of state-owned enterprises?

Fourth, what are the solutions (including specific solutions) to promote the equitization of state-owned enterprises in Hanoi in the coming time?

Fifth, what are the measures to improve the State management of equitization of State-owned enterprises in Hanoi? What conditions and recommendations are needed to successfully implement these measures?

6. Scientific and practical significance of the topic

The thesis has systematized the theoretical basis of equitization of state-owned enterprises; proposed the concept and conception of state management of equitization of state-owned enterprises. Determined the contents of state management of equitization. Analyzed the inevitable process of equitization of state-owned enterprises, affirmed that joint stock company is an enterprise model with methods of capital mobilization and use that bring optimal efficiency.

The thesis has clarified the current status of the equitization process and the work of State management on equitization, thereby pointing out the shortcomings, limitations and causes of this situation.

Building a system of solutions to promote the equitization process and improve state management of equitization of state-owned enterprises under Hanoi city.

The complete thesis includes a system of theoretical and scientific foundations and practical proposals and solutions to innovate state management work for equitization.

7. Structure of the thesis

In addition to the introduction, overview of research works related to the topic, conclusion, appendix, list of references, the content of the thesis is arranged into 03 chapters:

Chapter 1: Scientific basis for state management of state enterprise equitization.

Chapter 2 : Current status of state management of equitization of state-owned enterprises in Hanoi city.

Chapter 3 : Some solutions to improve state management of enterprise equitization

State-owned enterprises of Hanoi city.

OVERVIEW OF RESEARCH WORKS RELATED TO THE TOPIC

1. SUMMARY OF RESEARCH SITUATION

1.1.1. FOREIGN STUDIES

The book “Public Economics” (research work by J.Stiglitz, 1988) [106, pp.5-33]:

He believes that the views of society as well as the academic community on SOEs are quite scattered. Some supporters of SOEs believe that SOEs can operate according to long-term plans better than private enterprises because the State has better position and information than private enterprises to make and operate plans. According to J.Stiglitz, SOE managers have two advantages over private enterprise managers: they are less pressured by competition and less worried about bankruptcy. He also doubts the possibility of reform to improve the operational efficiency of SOEs. Thus, the issue of equitization of SOEs has not been resolved in this document.

Research work “Transforming state-owned enterprises - managing radical organizational change in a deregulated environment” (by Barry Spicer, David Emanuel, Michael Powel) [104, pp.33-86]:

The authors have studied the process of organizing and rearranging SOEs from the perspective of SOE restructuring solutions in different countries, especially countries with transitional economies. According to this group's point of view, equitization is a solution to transfer state production facilities to the private sector and considers it an inevitable part of the process of transforming a planned economy into a market economy, emphasizing the process of dissolving SOEs and restructuring them according to shock therapy, focusing on national equitization (Russia) or state-owned privatization (Eastern European countries as the focus).

The authors have studied the process of organizing and rearranging SOEs from the perspective of restructuring solutions for SOEs in different countries. At the same time, they have proposed 5 solutions that can be applied to achieve success in reforming SOEs. However, the contents related to enhancing the equitization of SOEs have not been mentioned.

The work “The State Sector: The Scope and Limitations of the State as a Shareholder” (by Èslie Cohen, 1997) [104, pp.6-34]: Expresses the view against massive investment and State subsidies. He believes that, fundamentally, the State is no longer able to successfully assume the role of a shareholder because it is torn between many opposing goals.

established at the same time and the state of public finances could cause the State to exploit SOEs. He supports the policy of attracting private capital into SOEs. This work does not mention State management of SOE equitization.

Corporate monitoring by controlling shareholders (author: Luc Renneboog, Professor of Corporate Finance, Tillurg University and European Institute of Corporate Governance, 2010) [107, pp.43-72]:

The author investigates whether the role and effectiveness of monitoring by controlling shareholders as a corporate governance mechanism differ across countries.

In particular, he examines the concentration of control and its role as a mechanism for disciplining or punishing inefficient firms. He is also interested in the role of equity markets, internal board structure, and creditor monitoring as alternative mechanisms to strong concentration of control.

This work has only touched on one aspect of governance, which is the role of corporate governance by controlling shareholders.

Financial Behavior of Japanese Firms (by Robert J.Ballon, New York: Kadansha international, 1988) [110, pp.126-154]:

The author clarifies the role of finance in the operations of Japanese companies, including research on the business and financial management of companies. Financial status, balance of income and expenditure, capital preservation, financial services, profits earned, forms of lending; forms of stock operations; reports on the financial status of companies. The book does not show the role of the State in managing companies.

International Competition Policy: Maintaining Open Markets in a Global Economy (by Michael A. Utton, Cheltenham-Northampton: Edward Elga, 2006) [108, pp.13-73]:

The book presents the basics of competition and trade policies. The impacts of market globalization on equitization and anti-dumping monopolies. Analysis of difficulties arising from restrictions and constraints on cooperation, statistical analysis of prices of reputable companies and international joint ventures and associations.

The author has mentioned the impact of equitization on the whole world, but has not proposed a solution.

Tolley's Business Law (AL Chapman, RMBallard, published by Tolley Publishing Company in London, 1983) [113, pp.6-44]:

The author has presented the legal issues of joint stock companies, commercial enterprises, financial and accounting principles and regulations. Especially the roles and responsibilities of directors as well as accountants and secretaries.

The book only explains legal issues for joint stock companies, not mentioning enterprise equitization.

Commercial Bonds and Investment in Risk Management , Arbitrage and Investment Value (by M.Anthony Wong, in collaboration with Robert High John Wiley, 1991) [109, pp.1-10]:

This book covers the U.S. government bond market. Information on U.S. Treasury bonds, bond pricing models, and computer technology used for value investing.

The author only mentioned the stock market model, not the State management process of joint stock companies.

Principles of Corporate Finance (by Richard A Brealey, in Boston: Irwin/Mc Graw- Hill, 2003) [111, pp.2-49]:

The book presents general concepts of financial management, opportunity value of capital, stock value, investment decision making, risk. Practical issues of budgeting, markets, equity policy, capital structure.

There is a book about stocks but the author has not mentioned the equitization of state-owned enterprises in this book.

Essentials of Corporate Finance (by Stephen A.Ross, Randolph W.Westerfield, Bradford D.Jordan, in New York: McGraw- Hill/ Irwin, 2004) [112, pp.6-24]:

The book provides a general overview of financial management, knowledge about financial situation and cash flow, calculating stock value, securities, financial budget and corporate capital; business crisis and recovery; short-term and long-term debt financial management.

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