Which institutions influence enterprise performance by legal forms? Evidence from a transitional economy

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Abstract

The study analyzes the differences in the impact of economic and political institutions (PI) on the performance of legally regulated business groups in Vietnam. Additionally, the study explores which types of businesses utilize resources like capital and labor most effectively. Therefore, the study is developed based on the combination of economic growth theory and new institutional economics (NIE) theory, alongside the perspective of Acemoglu and Robinson (2013) on the deep relationship between economic and political institutions. The research utilizes secondary data on companies, as regulated by Vietnamese law, and indices measuring institutional governance and economic freedom (EF) during the period 2000–2022. The study utilizes the pooled mean group (PMG) autoregressive distributed lag (ARDL) model, leveraging its capabilities to classify enterprises based on capital sources and legal regulations to identify differences between the groups. Economic and political institutions exert varying influences on the performance of different enterprise types, particularly state-owned, foreign-invested, and private enterprises. State-owned and private enterprises face significant challenges in leveraging economic institutions (EI), especially when encountering unexpected changes. Foreign-invested enterprises excel in integrating input factors, whereas private enterprises must strive harder to address resource limitations. The research results suggest reforms in flexible institutional models and specific policy mechanisms to support private enterprises.

Keywords: Economic Institutions, Political Institutions, Business Performance, Labor, PMG-ARDL, Vietnam

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: C53, H11, O21, O43, P21

Received: 12.04.2025
Revised: 04.08.2025; 13.09.2025; 23.01.2026
Accepted: 30.01.2026
Published online: 03.02.2026

How to cite this paper: Le, P. N. M. (2026). Which institutions influence enterprise performance by legal forms? Evidence from a transitional economy. Corporate Law & Governance Review, 8(1), 124–135. https://doi.org/10.22495/clgrv8i1p10