The impact of equitization on financial and operating performance of state-owned enterprises (SOEs) in Vietnam: An approach using propensity scorematching

Use your smartphone to scan this QR code and download this article ABSTRACT This paper examines the impact of equitization on financial and operating performance of stateowned enterprises (SOEs) in Vietnam. Previous related privatization theories have not explained whether there is an improvement in financial and operating performance of equitized SOEs compared to non-equitized SOEs or not. This study proposes to use with-without comparison method through the average treatment effect measuring the impact of equitization on financial and operating performance of SOEs. By using data of 114 SOEs equitized in the period from 2012 to 2014, the author finds that equitized SOEs can not improve profitability, operating efficiency, and output when considering non-equitized SOEs. There is also no evidence for a reduction in the number of employees of equitized SOEs after equitization. These findings are in contrast to previous studies in Vietnam, but there are similarities with the results of studies in China. This is because equitized SOEs in the early post-equitization period in Vietnam are still monitored by the Vietnamese government, as well as the equitized enterprises in the period 2012-2014 are mainly large-scale ones with slow change of operating objectives, monitoring mechanism and weak competitiveness after equitization. However, equitization can help equitized SOEs operate more efficiently than non–equitized SOEs when considering non-listing status or industry group. This research provides implications for the Vietnamese government to encourage non-equitized enterprises to participate in the equitization program actively. The research results also help investors to have appropriate long-term investment strategies in equitized SOEs. This paper also has some limitations for further research.


OVERVIEW
explain that privatization is known as selling public assets to the private sector 1 . Privatization reallocates resources of SOEs through private sector participation. In Vietnam, the state often uses the term 'equitization' instead of 'privatization' because equitization is the process of transferring assets of SOEs to the private sector, but the state still controls equitized SOEss after equitization in some SOEs. From 2016 up to present, the number of equitized enterprises was limited. There were only 55 equitized enterprises in 2016, while the equitization plan for the period of 2016 to 2020 would reach 240 enterprises. In this stage, the equitization progress has been slow due to several main reasons as follows: First, there are many ideas that state-owned enterprises should play the leading role, so reducing the number of state-owned enterprises will reduce this role. Second, after more than 15 years of equitization, the remaining SOEs in the equitization list are medium and large scale ones. The equitization of large scale ones is increasingly complex, especially in the valuation of state-owned assets. Third, some leaders or agents of state-owned enterprises fear that they will lose or reduce their control over SOEs when transforming SOEs from state ownership to private ownership, so they have actively slowed equitization progress and interfered equitization process.The equitization process in Vietnam in recent years has shown slow progress due to various reasons. According to Odle, the third privatization stage marks the completion of the privatization program, but there are largescale SOEs in this stage, and participation of these SOEs has a significant impact on the success of the privatization program 2 . However, empirical studies have inconsistent results of the equitization impact in Vietnam. Pham also suggests that equitization may not have a positive impact on equitization, especially when compared with nonequitized SOEs 3 . These results are similar to empirical studies in China, where equitization is less likely to   Claessens and Djankov confirm that privatization helps equitized SOEs improve their financial and operating performance 1, [5][6][7] . Studies in developed and developing countries mostly use the pre-post comparison method and do not use with-without comparison method. Studies in China and Vietnam, in particular studies by Nhan and Son, Hung et al., Loc and Tran also use with-without comparison method, but these studies use inappropriate characteristics to define the similarity between equitized and non-equitized SOEs [8][9][10] . These studies do not use industry characteristics to compare these two groups. According to Porter, each industry has a different operating and regulatory environment, so we can only compare firm performance within one specific industry 11 . However, previous studies have certain limitations: (1) When comparing with the non-equitized SOEs, these studies only used establishment year and firm size to determine propensity score, so the comparison is inaccurate since we can not compare between two firms in different industries. (2) Previous studies in Vietnam focused on SOEs equitized in the first and the second stage, so these studies have not considered large-sized SOEs; (3) Previous studies have not performed robustness testing in propensity score matching technique, and they only used one radius matching to set up common support area. Common support area contains propensity scores where equitized SOEs (treatment group) and non-equitized SOEs (control group) have similarities in some characteristics. This study solves the above problems when using PSM technique with four control variables, including establishment year, equitization year, firm size and industry to identify common support areas between equitized SOEs (treatment group) and non-equitized SOEs (control group). Research data include largescale SOEs in the third equitization stage, especially from 2012 to 2014. Furthermore, the authors also perform robustness testing of the PSM technique to evaluate the equitization impact for more accurate results. This study is organized into six parts: (1) introduction, (2) review of prior studies, (3) research methodology and data, (4) empirical results, (5) conclusions and discussion, and (6) summary and implications.

Related theories
The public choice theory was first proposed by Tullock and Buchanan to identify the impact of privatization on firm performance. This theoretical focus emphasized on financial and operating performance of SOEs when it explained that SOEs are less efficient because politicians only aim to orientate state-owned enterprises to increase their power without considering financial and operating performance of SOEs 12 . Therefore, privatizing these enterprises is necessary in order to set up the business objectives of the enterprises through transferring ownership rights to private entities. The theory also assumes that state-owned enterprises aim to maximize budgets, disperse risks, maximize labor and investment rather than maximize profits. William L. Megginson et al. argue that if state-owned enterprises were privatized, there would be an improvement in firm performance 1 . Property rights theory is built on the fundamental advantage of ownership. Private-sector firms are more experienced than state-owned enterprises in decision-making and operate more effectively than SOEs, although they operate in the same industry environment. For stateowned enterprises, the ownership of corporate stakeholders is simply state ownership, so it is difficult for them to operate effectively. State-owned enterprise managers generally do not benefit from SOEs' operating profits, so they have no motivation to manage them well. According to this theory, public agents of SOEs do not work hard in management and do not need many innovations in managing SOEs. The theory of competitive advantage is actually derived from explaining competitive advantages at the industry level and then developing into competitive advantages at the national level. Porter presents this theory and refers to the issue of competition at an industry level or national level 11 . According to Porter, the competitive nature and resources of competitive advantage vary widely among industries or even in small segments within the same industry 11 . A study by Megginson and Netter also suggests that real sales of SOEs in different industries could be improved differently after privatization 13 . Therefore, the industry characteristics and competitiveness of each industry will determine financial and operating performance of enterprises after privatization.

Empirical studies
Primarily, related privatization theories only explain that private ownership has more advantages than state ownership, and these theories approve that privatization will help state-owned enterprises improve their financial and operating performance after privatization. An important study by Cuervo and Villalonga, demonstrating that privatization and ownership are not the main determinants of firm performance af ter privatization 14 . These authors develop one model to explain the variability in financial and operating performance of enterprises after privatization. Empirical results show that privatization and contextual factors (privatization methods, prior-restructuring, deregulation) help to change in governance, ownership structure. After that, the post-privatized enterprises will change their operating goals, incentives, and control. Next, enterprises will change their operational strategies, organizational structure, and organizational culture. As a result, the variations have to be explained through a process like this. Studies in China also show that some measures of financial and operating performance of privatized enterprises after privatization declined or did not significantly change, such as profitability. This finding is inconsistent with research results by some authors in other developed countries, such as Megginson et al., Boubakri and Cosset, Megginson and Netter, Pohl et al., Claessens and Djankov 1,5,7,13,15 . Privatization in China also has several cases where the state still holds many shares in enterprises after privatization in some industries and critical corporations. This is a similar characteristic in the privatization process between China and Vietnam. Jiang et al., Wei et al. also prove that the profitability of privatized enterprises declined after privatization, and this finding is in contrast to research work by Megginson et al. 1,4,16 . In order to compare the performance of enterprises after privatization and non-privatized ones, previous studies have used a with-without comparison method. Frydman et al., Claessens and Djankov, and Pohl et al. are propositional authors who use withwithout comparison method to assess the impact of privatization in European countries [5][6][7] . In particular, Claessens and Djankov argue that privatized firms are more efficient than non-equitized firms 7 . Nhan and Son, Hung et al., Loc and Tran also use with-without comparison method between two groups of equitized and non-equitized SOEs for considering differences in their financial and operating performance [8][9][10] . In general, international studies and empirical studies in Vietnam have demonstrated that privatized SOEs have better financial and operating performance than non-privatized SOEs, so the author proposes the new hypothesis as follows: Hypothesis 1: Equitized SOEs will have better financial and operating performance after equitization than non-equitized SOEs (considering only post-equitization period) According to Loc and Tran, the equitization process helps SOEs increase their profitability, reduce leverage, total assets turnover, and employment 10 . However, These studies have shown that there is no evidence of increased labor productivity after equitization (if considered with non-equitized firms). This research has some differences compared to the study conducted by Loc and Tran when profit after tax is applied instead of profit before tax 10 . Besides, this study uses the net income efficiency ratio. Thus, the next research hypothesis can be stated as follows: H2: Equitized SOEs will have better financial and operating performance after equitization than nonequitized SOEs (considering the difference in measures between pre-post equitization windows).

Research methodology
Previous studies used pre-post comparison, withwithout comparison, and regression methods. This study mainly uses with-without comparison method. According to Khandker et al., a with-without comparison method is another option when evaluating the effectiveness of a program. This method is used through a technique known as propensity score matching and was first proposed by Rosenbaum and Rubin 17,18 . The advantage of this method is that it eliminates the possibility of selection bias because the selection of two participants in the program has some similarities in characteristics. Claessens and Djankov and Pohl et al. suggest using this method to assess the effects of privatization in European countries 5,7 . Claessens and Djankov argue that privatized SOEs are also more efficient than non-privatized SOEs 7 . Loc and Tran, Nhan and Son continue to use this method to measure how equitization impacts on firm performance 8,10 . Hung et al. used this method but compared between equitized SOEs and private firms 9 . This study uses the with-without comparison method but chooses four variables of establishment year, firm size, industry, and equitization year to determine the propensity score in order to identify similarities between the treatment and control group. Besides, this study also uses a robustness test for consistent result testing 17 . This study adopts direct nearest-neighbor matching (nnmatch) and five nearest-neighbor matching (psmatch) to test the robustness of the average treatment effect. The studies by Loc and Tran, Nhan and Son, Hung et al. only apply radius matching (0.001), and this is also one limitation of these studies [8][9][10] .

Data
The initial data includes information about firm performance from the Vietnamese General Statistics Office. The initial data includes 114 equitized SOEs in the period of 2012-2014 and 312 non-equitized SOEs. This paper uses firm performance data from 2010 to 2016. Firm performance measures are calculated in average values for two years before and after equitization. Previous studies use from 2 to 10 years to be privatization windows. This study uses two-year equitization windows because of data characteristics in Vietnam and data of two-year equitization windows was also applied by most of the empirical studies in Vietnam, such as studies by Nhan   Loc and Tran use the following measures, such as profitability, total asset turnover, labor productivity, debt ratio and total employment 10 . The authors argue that post-equitization enterprises will receive tax incentives in the first year after equitization, so using ROA, ROE and ROS will not accurately reflect financial and operating performance after equitization. However, this research will use after-tax earning for calculating ROA, ROE and ROS because many international empirical studies have used earning after tax instead of earning before tax. This research uses the same measure with most of the previous studies to compare findings better. It is also challenging to measure tax incentives of post-equitization enterprises because Vietnamese government have different support for them. Based on the above empirical results and hypothesis development, the author proposes some variable measurement and testable prediction presented in Table 1. Loc and Tran, Nhan and Son also applied a combination of PSM and DID for measuring the equitization impact (these authors used earning before tax instead of earnings after tax to calculate profitability) 8,10 . The authors calculate the two-year average values of measures in pre-post equitization windows presented in Table 2. Most empirical studies in Vietnam used two-year equitization windows to increase sample size and two-year average values can also be used for different statistical tests. The symbols A and B (Table 3) denote for measures of equitized SOEs after equitization and non-equitized SOEs in the same period, respectively. The research work also adopts with-without comparison method through the combination of PSM and DID techniques. There are three steps for this method, and the first step is to define the common support area. The second step is to calculate pre-and post-equitization differences between the equitized group and non-equitized group (DID technique), and the third step is used to assess the average treatment effects of equalization on the performance of the two groups.

Descriptive statistics
The initial data includes 114 equitized SOEs in the period of 2012-2014 and 312 non-equitized SOEs. According to Khandker et al., the number of nonparticipants in the control group should be larger than the number of participants in the treatment group and this will help to identify common support areas easily 17 . Using criteria of firm size, establishment year, equitization year and industry to identify common support area, the authors eliminated 16 observations (16 nonparticipating enterprises) to satisfy balancing conditions. The number of non-equitized SOEs i20s 296 (72.20%), and the number of equitized SOEs is 114 (27.8%) ( Table 4). According to the number of SOEs by year presented in Table 5, Most SOEs are chosen in 2013 (47.07%), followed by the number of SOEs in 2014 with 176 enterprises (accounting for 42.93%). This result comes from the fact that the number of equitized SOEs in 2012 is only 9, so the number of non-equitized enterprises selected in this period is less than in other periods. Table 6 shows that SOEs generally have a significant difference in performance, sale efficiency, and employment have the highest standard deviation. This shows that SOEs have a different firm size in terms of employment and real sales. SOEs have high average real sales of nearly 288 billion VND and an average number of employees of 635, indicating that SOEs in this sample are large-scale ones. This is also the practical contribution of this study because previous studies in Vietnam mainly focus on small and mediumsized SOEs (SOEs equitized in the first and second  Two-year preequitization average of the measure     For unlisted enterprises within one year of equitization, their financial and operating performance is much lower than non-equitized firms in the same period ( Table 9). The authors classify SOEs into three industry groups. The first group includes SOEs from the first industry to the third industry (agriculture, mining, and manufacturing industries), the second group includes SOEs from the fourth industry to the sixth industry (power, water supply, and construction industries), and the third group includes SOEs from the seventh industry to the twelfth industry (transportation, retailing, hospitality, telecommunication, banking, insurance, and real estate industries).
In the case of applying the PSM technique for equitization years, the authors use only three characteristics to determine propensity score, including establishment year, firm size, and industry (as each year is studied separately). The impact of equitization on the post-equitization financial and operating performance of equitized SOEs are as follows:

Profitability
The results show that there is no evidence that the overall post-equitization profitability of equitized SOEs is improved (concerning non-equitized SOEs). This finding is consistent with research by Megginson et al. 1 . However, in terms of equitization year, the equitization process helps SOEs equitized in 2012 to improve their ROA compared to non-participating SOEs (the average improvement is 52.5%). However, SOEs equitized in 2014 have a lower ROE than nonparticipating firms (3.8%).

Operating efficiency
There is no improvement in firm performance of equitized SOEs, and the total asset turnover of equitized SOEs is lower than non-equitized firms (35.6%). This ratio shows that the ability of equitized SOEs to generate revenue on assets in the post-equitization period is lower than that of non-participating firms. Research results show that equitized SOEs do not perform as well as non-equitized firms after equitization as they face new challenges in the competitive business environment, changes in ownership structure and regulation. 3,4 . Considering the small and medium-sized enterprises, the sale efficiency of equitized SOEs is much lower than that of the non-participating SOEs (453,598 million VND/employee on average). Considering the non-listing status, non-listed equitized SOEs will have lower operating efficiency than that of non-equitized SOEs. This is a fascinating finding that equitized SOEs in Vietnam are not able to operate more efficiently than non-participating firms if they are not listed (sale efficiency is lower than 709,635 million VND/employee on average and total asset turnover is lower than 36.8% on average).
On an industry group basis, Table 10 shows that SOEs equitized in the third industry group are significantly less efficient than non-participating firms in terms of sale efficiency (1290,292 million VND/employee on average). Also, the total asset turnover of equitized SOEs in the third industry is lower than that of nonparticipating firms (79.5% on average).

Output
The post-equitization real sales of equitized firms are also not better than non-participating firms. This result also explains why equitized SOEs have lower total asset turnover than non-participating firms. Vietnamese equitization is similar to privatization in China, where the state still holds shares in some equitized firms after equitization and controls these firms. In some cases, while these enterprises operate in a competitive environment, the ability to improve sales is challenging (lower than that of the control group of 277,304.75 million VND on average). Another reason is that the actual real sales of the two groups (in terms of large-scale firm size) are significantly different (treatment group has lower real sales than the control group of 228,427.05 million VND on average). Firms in the first and third industry groups have lower real sales than non-participating SOEs (312,456.1 million VND and 820,619.35 million VND respectively).
Considering the equitization years presented in Ta  with the participation of private ownership so that they will cut unnecessary employment expenses.

Leverage
In general, there is no significant change in the leverage of the two groups. As presented, the state still controls equitized SOEs after equitization in some cases, so they operate similarly to the non-participating SOEs in general. However, there is a difference in the leverage by industry group. Specifically, SOEs equitized in the second industry group have lower leverage than non-participating firms. This also coincides with previous studies that privatization helps firms reduce leverage because of the opportunity to issue more shares rather than use debt.

General Conclusions
Considering only post-equitization financial and operating performance, equitization does not help equitized SOEs to improve their profitability, operating efficiency, real sales, labor, and leverage compared with non-equitized SOEs. This conclusion is inconsistent with research works by Frydman et al., Claessens and Djankov and Pohl [5][6][7] . Considering firm size, nonlisting status, industry group and equitization year, the results are similar to the general analysis, which means that equitization does not help equitized SOEs to improving financial and operating performance of equitized SOEs. To explain this phenomenon, the authors found that the equitized enterprises in this period were mostly large-scale ones operating in a multi-industry environment and complicated ownership structure, so they could not operate efficiently in the post-equitization period compared with nonequitized SOEs. Besides, the state still holds shares and control these equitized SOEs in some cases, and this is similar to the case of China. Cuervo and Villalonga explain that privatization only changes firm ownership structure, which is not a determinant affecting the firm performance of equitized SOEs 14 .

The impact of equitization on pre-post equitization financial and operating performance
In this case, the authors use the PSM technique combined with the DID technique to assess the equitization effect. Similarly, this paper examines the effect of equitization on the pre-post equitization difference in financial and operating performance of treatment group compared with control group based on different classification criteria, such as general evaluation, firm size, non-listing status, industry group and equitization year. Using the PSM technique, the authors select 410 enterprises, including 296 non-equitized ones and 114 equitized ones in the same period (Table 12). When classifying the sample by firm size, the authors classify the sample into two groups of large-scale and medium and small-sized enterprises presented in Table 13. Table 14 shows that the number of non-equitized enterprises is 368, and there are 74 equitized SOEs. Similarly, Table 15 and Table 16 show that enterprises are also classified by industry groups and by three years of 2012, 2013, and 2014.
The results of equitization impact assessment on the pre-post equitization difference in financial and operating performance of the treatment group compared to the control group are as follows:

Profitability
In general, equitized SOEs do not improve their profitability after equitization compared to nonparticipating firms. However, a notable result is that unlisted equitized SOEs have better profitability compared to non-participating firms (ROA is 13% higher than that of the control group on average, ROE is 4.3% higher than that of the control group on average).
Considering enterprises belonging to the third industry group in Table 15, equitized SOEs have a higher profitability compared to non-participating firms (profitability is 12.9% higher than that of the control group on average, ROE is 37.2% higher than that of the control group on average). Considering the equitization year inTable 16, SOEs equitized in 2013 have higher profitability than that of non-equitized SOEs (5.8% on average).    ***, **, and * stand for significance levels at 1%, 5%, and 10%.

Operating efficiency
When considering the profitability, non-equitized SOEs have better-operating efficiency than equitized SOEs (196.24 million VND/employee on average). The reason is that SOEs equitized in 2013 do not improve much in terms of net income efficiency compared to non-participating firms (206,282 million VND/employee on average). This result is contrary to previous studies by Loc and Tran, Nhan and Son 8,10 .
Considering large-scale enterprises, the net income efficiency of the participating firms can not be improved compared with the non-participating firms (299,398 million VND/employee on average). The total asset turnover of the participating firms in the first industry group also can not be improved compared with the non-participating firms (the difference is 30.4% on average). This is because SOEs equitized in 2014 do not improve total asset turnover compared with non-participating firms (the difference is 25.2% on average).

Output
The improvement in the real sales of the participating firms is even lower than that of the non-participating firms (130,708.55 million VND on average). Improvement in real sales of unlisted SOEs is also lower than non-participating firms (47,624.595 million VND on average). This is due to the fact that SOEs equitized in 2014 have a lower improvement in real sales compared to the non-participating firms (about 128,978.05 million VND on average).

Employment
The results show that participating firms in the third industry group have an increase in the labor force after equitization compared to non-participating SOEs (170 employees on average). This is in contrast with previous studies. This is because firms in the service industry (third industry group) increase employees to provide more services to customers.

Leverage
In general, the leverage of the treatment group is lower than that of the control group, which is quite similar to the previous empirical studies (10% on average). The results also show that equitized firms use lower leverage than non-participating firms in the same period. This is because large-scale SOEs in the treatment

Robustness test
In previous studies, Nhan Table 7 to Table 16. Each table has two columns showing two different methods, including direct nnmatch (nearest-neighbor matching) and psmatch (neighboring matching).

CONCLUSIONS AND DISCUSSION
The equitized SOEs do not improve firm performance compared to the non-participating firms. There is also no evidence for a reduction in the number of employees of equitized SOEs after equitization. This conclusion is in contrast to previous studies by Loc and Tran (2016), Nhan and Son, but there is a similarity with the results of studies by Jiang et al., Wei et al. 4,8,10,16 . This is because the equitized enterprises in the period 2012-2014 are mainly large-scale ones with slow change of operating objectives, monitoring mechanism and weak competitiveness after equitization. Also, equitized SOEs could not solve problems in the pre-equitization period, so they still suffer these problems even in the pos-equitization period. According to Jiang et al. (2009), some preequitization difficulties of equitized SOEs should include financial debt, irrecoverable debt, redundant workers. After equitization, it is more difficult for joint-stock enterprises to access capital than stateowned enterprises because there are no more incentives compared to pre-equitization period, the State no longer has preferential policies for joint-stock enterprises. Especially, managers from joint-stock companies were mostly transferred from state-owned enterprises with the same management style while equitized SOEs have to face many changes in competition, market and technology.  Besides, equitized firms have reduced leverage compared to non-participating firms. According to Loc and Tran, equitized SOEs are less likely to use debt after equitization, instead of increasing equity through issuing stocks after equitization 10 . Although equitized have not improved significantly in terms of profitability, operating efficiency and output compared to non-participating firms in the short run, it is clear that there is a fundamental change in the ownership structure of participating firms to positively participate in a more competitive environment, and appropriate control over their performance so that they can operate more efficiently than non-equitized firms in the long term. The results also show that unlisted firms have higher ROA than non-equitized firms, or SOEs equitized in 2013 have higher ROA and ROE than nonequitized firms. Therefore, the results of this study contribute to the practical aspects compared with previous empirical studies in Vietnam because this study considers the equitization impact and the equitization impact is considered based on non-listing status, firm size, equitization year and industry group. As a result, investors can make appropriate investment decisions.
Enterprises can look at their business characteristics to forecast their ability to improve financial and operating performance after equitization or policy-makers can consider appropriate regulations.

SUMMARY AND IMPLICATIONS
In general, the results of the two methods are quite similar to the general conclusion is that the equitized SOEs do not improve performance after equitization. The author proposes some policy implications as follows: 1. The Vietnamese government should have appropriate policies to support equitized enterprises, especially in the first years of the postequitization period. Research results show that equitized enterprises have not improved their financial and operating performance in the first two years due to difficulties such as new entry into the competitive environment, ownership structure change, lacking competitive ability compared with private enterprises in the same industry. In the short run, equitized firms are less efficient than non-participating firms, but the number of employees and leverage of equitized SOEs is lower than that of non-equitized SOEs after equitization. Equitized SOEs tend to reduce the level of debt and issue more stocks, which help to reduce financial risk after equitization. Equitization does not always help businesses operate more efficiently, and the impact of equitization on firm performance depends on equitization year, non-listing status, firm size, or industry groups. 2. Non-equitized enterprises should actively participate in equitization when they have enough conditions, and they should have clear operational and strategic plans after equitization because equitization does not always help equitized SOEs to operate more efficiently compared with non-equitized SOEs after equitization. According to Cuervo and Villalonga, equitization is only a remarkable event when equitized SOEs change their ownership structure, while other factors such as operating objectives, control mechanisms, new strategies affect firm performance after privatization 14 . 3. Although equitized SOEs do not improve firm performance compared to non-participating SOEs in general, they can improve their performance if we consider subsamples based on equitization year, non-listing status, firm size and industry groups. For example, unlisted equitized SOEs have higher ROA than non-equitized SOEs, or SOEs equitized in 2013 have higher ROA and ROE than non-equitized SOEs. These new findings help investors to have appropriate long-term investment strategies because equitized firms are not always effective after equitization, especially in the short term.
The results of the study show that equitization does not always help equitized SOEs to operate more efficiently after equitization compared with nonequitized ones and this impact depends on equitization year, non-listing status, firm size and industry group, which reveal that related theories have certain limitations since they do not consider these characteristics to explain the impact of privatization or equitization on firm performance in general. This study does not explain how equitization affects financial and operating performance of participating firms compared to non-participating firms in the long run and how different equitization periods affect financial and operating performance of equitized SOEs. Based on the limitations of this study, the author suggests further research to overcome these limitations.

ABBREVIATIONS
DID: difference-in-difference EMPL: Total Number of employees LV: Leverage NIEFF: Net income efficiency