Title: Product market competition and investment efficiency: indications from the developing economy

Authors: Nguyen Vinh Khuong; Pham Duc Tien

Addresses: University of Economics and Law, Ho Chi Minh City, 700000, Vietnam; and Vietnam National University, Ho Chi Minh City, 700000, Vietnam ' University of Economics and Law, Ho Chi Minh City, 700000, Vietnam; and Vietnam National University, Ho Chi Minh City, 700000, Vietnam

Abstract: Product market competition (PMC) has been found to be one of the most effective corporate governance instruments for encouraging managers to maximise business value. As a result, it influences economic decisions, which in turn promotes investment efficiency and stability in the economy. The objective of this paper is to examine the impact of PMC on the investment efficiency of companies listed on the Vietnamese stock market. The sample includes 401 non-financial companies listed on the Ho Chi Minh Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX) from 2015 to 2022. The GLS estimation method is used in this paper to address common issues with panel data such as heteroscedasticity and autocorrelation. The results of the multivariate regression analysis show that PMC has a positive impact on investment efficiency. It is imperative for policymakers to keep an eye on the monopolistic practices of corporations in order to safeguard the interests of stakeholders, facilitate informed investment decisions, and enhance investment efficiency and value generation.

Keywords: product market competition; market competition; investment efficiency; capital investment.

DOI: 10.1504/IJTGM.2024.145838

International Journal of Trade and Global Markets, 2024 Vol.20 No.3/4, pp.159 - 179

Received: 25 Sep 2024
Accepted: 06 Dec 2024
Published online: 29 Apr 2025 *

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