The role of the Vietnamese equity capital market in fostering business development and economic growth

Submission note: A thesis submitted in total fulfilment of the requirements for the degree of Doctor of Philosophy to the School of Business, Faculty of Business Economics and Law, La Trobe University, Bundoora.

This study evaluates Vietnam’s equity market in facilitating the sourcing of capital for business development and economic growth in an emerging and transition market environment. Vietnam’s economy is considered to be an “emerging market” and a “transition market”. The term “emerging market” describes an economy with nascent capital markets that is of high-risk and higher volatility than advanced industrialized economies and the absence of a history of foreign investment (Mody 2004). Vietnam is still a “transition market” as its economy is still in the process of moving from a centrally planned to a market economy with remarkable economic progress in recent years. The country’s Doi Moi or “renovation” policy for transition to a market economy introduced in the late 1980s has seen the implementation of macroeconomic and structural reforms that have been generally successful and sustainable. As part of market reform, Vietnam’s financial markets needs to be more market driven as opposed to the predominantly bank-based system that exists now. Therefore, it is important to gain a greater understanding of the role and impact of equity capital on Vietnam’s emerging market because of its implications as a stimulus for business creation, economic growth and international development from its inspiration to become an industrialised country and as a member of the WTO. The role of equity markets as a stimulus for economic expansion is widely evident in the literature; therefore, this study investigates those factors that influence the development of Vietnam’s equity market to provide knowledge and valuable insights for enhancing its performance.