State ownership, formality status and technical efficiency: evidence from Vietnamese SMEs

Nguyen-Thi-Kim Nguyen, Tuyen Tiet, Nguyen-Anh Tuan, Nguyen-Anh Thu, Nguyen-Quoc Viet and To-The Nguyen

International Journal of Management and Enterprise Development, 2023, vol. 22, issue 1, 25-44

Abstract: Small and medium-sized enterprises (SMEs) are critical in a rapidly growing economy like Vietnam, which requires significant government assistance. Our analysis begins by examining the technological efficiency of enterprises utilising data from Vietnamese SMEs from 2017 to 2018. We then examine the effects of formality status and state ownership as a proxy for political ties on the technical efficiency of SMEs in Vietnam. We found that policies should reduce cronyism in firm-state relationships to incentivise firms to invest in improving productivity. Moreover, to boost productivity, it is critical to promote formalisation by raising the number of legally registered businesses, the level of tax registration, and the number of formal labour contracts.

Keywords: formality; small and medium scale firms; state ownership; technical efficiency; Vietnam. (search for similar items in EconPapers)
Date: 2023
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