Corporate Bond Market in the Transition Economy of Vietnam, 1990-2010

Corporate bond appeared early in 1992-1994 in Vietnamese capital markets. However, it is still not popular to both business sector and academic circle. This paper explores different dimensions of Vietnamese corporate bond market using a unique, and perhaps, most complete dataset. State not only intervenes in the bond markets with its powerful budget and policies but also competes directly with enterprises. The dominance of SOEs and large corporations also prevents SMEs from this debt financing vehicle. Whenever a convertible term is available, bondholders are more willing to accept lower fixed income payoff. But they would not likely stick to it. On one hand, prospective bondholders could value the holdings of equity when realized favorably ex ante. On the other hand, the applicable coupon rate for such bond could turn out negative inflationadjusted payoff when tight monetary policy is exercised and the corresponding equity holding turns out valueless, ex post. Given the weak primary market and virtually nonexistent secondary market, the corporate bond market in Vietnam reflects our perception of the relationship-based and rent-seeking behavior in the financial markets. For the corporate bonds to really work, they critically need a higher level of liquidity to become truly tradable financial assets.

Getting to the Real Story: What Vietnamese business people wish foreigners understood about doing business in emerging and transition countries like Vietnam – BEFORE they start

Knowledge sharing typically examines organizational transfer of knowledge, often from headquarters to subsidiaries, from developed country sites to emerging country sites, or from host to local employees. Yes, recent research, such as Prahalad’s Bottom of the Pyramid, raises the question of reverse transfer of knowledge, or whether knowledge could and should be transferred from local sites to home country sites within an organization. As several emerging economies build their capabilities in knowledge, research and development, marketing, and the like, it only makes sense to consider what type of knowledge and how to transfer it in reverse or bi-directional manners. This paper takes one step back in the process. Rather than focusing on what knowledge transfer may make sense within an organization, we consider what types of knowledge are important for foreigners to know at the initial stages of engagement abroad as they consider whether to do business in an emerging country.