Profitability and marketability efficiencies of Vietnam manufacturing firms

Abstract

Purpose The purpose of this paper is to measure profitability and marketability efficiencies as well as examine the efficiencies’ determinants of listed manufacturing firms in Vietnam. Design/methodology/approach This study employs a bootstrap two-stage data envelopment analysis (DEA) approach to investigate the profitability and marketability efficiencies of 102 listed manufacturing firms on Vietnam stock market from 2007 to 2018. The study also applies fractional regression models (FRM) to identify the determinants of Vietnam manufacturing firms’ efficiencies. Findings The results reveal that Vietnam manufacturing firms obtain higher average profitability efficiency scores (0.888) than marketability efficiency scores (0.527) from 2007 to 2018. The high-tech firms achieve better profitability and marketability efficiencies than the traditional (resource-intensive and labour-intensive) Vietnam manufacturing firms in recent years (2016–2018). Further, the financial and non-financial factors have heterogeneous impacts on Vietnam manufacturing enterprises’ profit and market valuation efficiencies. Research limitations/implications Due to the nature of DEA technique that requires every decision-making unit to have available data of all inputs and outputs, the listed Vietnam manufacturing firms that have incomplete data or go public after 2007 are not included in the data set. Practical implications This study provides a reference for Vietnam manufacturing managers to position their firms competitively in the market as well as make wise operating, financing and management decisions. Originality/value This is the first study that attempts to combine bootstrap two-stage DEA and FRM, which are considered advantageous methods for DEA scores’ measurements and determinant evaluations in the current literature.