The Impact of ICT on Technical Efficiency of Vietnam’s Enterprises

Bui Thi Quynh Dao, Le Thi Thuy Hue, Nguyen Ngoc Van Khanh, Nguyen Lam Thanh Ngan and Vu Thuy Hong Phuoc
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Bui Thi Quynh Dao: Faculty of Finance and Banking, University of Economics and Law, VietNam National University, Ho Chi Minh City, Vietnam
Le Thi Thuy Hue: University of Economics and Law, VietNam National University, Ho Chi Minh City, Vietnam
Nguyen Ngoc Van Khanh: University of Economics and Law, VietNam National University, Ho Chi Minh City, Vietnam
Nguyen Lam Thanh Ngan: University of Economics and Law, VietNam National University, Ho Chi Minh City, Vietnam
Vu Thuy Hong Phuoc: University of Economics and Law, VietNam National University, Ho Chi Minh City, Vietnam

International Journal of Economics and Financial Research, 2021, vol. 7, issue 2, 65-73

Abstract: This research evaluates the impact of ICT on the technical efficiency of firms in 63 provinces and cities in Vietnam. We apply to use the DEA method in which we use the variable return to scale to evaluate because firm sizes in 63 provinces are different. At the same time, this method aims to minimize input factors without reducing output factors to measure technical efficiency. This result that is used a binary variable in the logit regression model to identify factors that have an impact on technical efficiency, especially the ICT factor. The research results show that only nearly 10% of the provinces could be technically efficient in business activities. Provinces with sustainable performance and efficiency all depend on influencing factors such as equity ratio, labor productivity, market size, investment, and especially the ICT factor keep increasing over the years and fluctuate around a pretty high level. On the other hand, for the group of unsustainable and ineffective provinces, these variables tend to decrease and fluctuate around at a low level. The research shows that factors in labor productivity, equity ratio, market size, investment, and ICT all have a positive impact on a firm’s performance in 63 provinces and cities of Vietnam. Therefore, firms that want to enhance their efficiency need to have strategies to improve the factors mentioned above. Moreover, the local government needs to improve the ICT index to help to increase their local Enterprises’ efficiency.

Keywords: Enterprises in vietnam; Technical efficiency; ICT index. (search for similar items in EconPapers)
Date: 2021
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