This paper examines empirically the net impact of residual state ownership on privatized firm efficiency in the transitional context of Vietnam. Vietnamese privatization has its own characteristics. Instead of mass and full privatization, Vietnam has chosen a partial and gradual path. Thus, it is important to assess the net impact of residual state ownership on privatized firms during the post-privatization period. This study employs stochastic frontier analysis to investigate the association between residual state ownership and the efficiency of privatized firms, using a sample of all privatized firms that are listed on the Vietnamese stock exchanges over the period from 2007 to 2017. Also, two-stage least squares regression is incorporated into the model to deal with potential endogeneity issues. Our study provides evidence that state ownership should not be considered as a pure source of agency problems. Indeed, the net impact of residual state ownership on privatized firm efficiency is non-monotonic, and the relationship between residual state ownership and privatized firm efficiency is under an inverted U-shape. A moderate level (less than 50%) of residual state ownership might be beneficial to privatized firm efficiency whereas too much state ownership is detrimental to the efficiency of privatized firms.

Abstract
1. Introduction
2. Literature Review
3. Research Methodology
    3.1. Research Methods
    3.2. Model Specification
    3.3. Data
4. Results
    4.1. Empirical Results
    4.2. Robustness Test
5. Discussion
6. Conclusion
References

• Manh Hoang NGUYEN(School of Business, International University, Vietnam National University) Corresponding Author
• Quy Thi VO(International University, Vietnam National University)