Inadequate corporate profitability and marketability efficiency: A case of Vietnam manufacturing enterprises

Abstract

The manufacturing sector plays an increasingly pivotal role in the development of Vietnam. In the context of economic integration, Vietnam manufacturing enterprises receive abundant investment and market-expansion opportunities that enhance their operating profits and market values. With the aim of supporting corporate managers to position their firms competitively in the market as well as make wise management decisions, this study employs bootstrap two-stage data envelopment analysis technique to investigate the profitability and marketability efficiency of 102 listed manufacturing firms on Vietnam stock market from 2007 to 2018. The study also applies fractional regression models for panel data to identify the determinants of Vietnam manufacturing firms' efficiencies. Based on the empirical results, the study reveals that Vietnam manufacturing firms obtain higher profitability efficiency scores (0.888) than marketability efficiency scores (0.527) during the study period from 2007 to 2018. Thus, listed manufacturing enterprises in Vietnam should place more emphasis on market attractiveness to boost their enterprises' market value. Besides, different manufacturing sub-sectors achieve different levels of profitability and marketability efficiency during the study period 2007 to 2018. Specifically, the modern (high-tech) firms achieve higher average marketability efficiency scores from 2007 to 2018 and better profitability efficiency performance in the recent years from 2015 to 2018 than the traditional (resource-intensive and labour-intensive) manufacturing firms. The results also show the diverse and significant impacts of firm age, headcount, institutional ownership, cash level, and leverage ratio on profitability and marketability efficiency of Vietnam manufacturing enterprises.