Technical Efficiency of Small And Medium Manufacturing Firms in Vietnam: Parametric and Non-Parametric Approaches

Nguyen Khac Minh, Long Giang and Bach Ngoc Thang
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Nguyen Khac Minh: National Economics University
Bach Ngoc Thang: National Economics University

Korean Economic Review, 2007, vol. 23, 187-221

Abstract: There is evidence that small and medium firms usually do not have high productive efficiency. This phenomenon can be explained by several factors. In this paper, it is analyzed by using the panel data of 1,492 firms from the Economic Census for Enterprises conducted by the General Statistics Office of Vietnam (GSO) during the period 2000-2003 with a parametric approach (based on stochastic frontier production function-SFPF) and a nonparametric approach (based on data envelopment analysis-DEA). Under the specification of variable return to scale (VRS), the mean technical efficiency of these small and medium firms was about 50 percent under the SFPF approach, and about 40 percent under the DEA approach. We also explore possible factors determining the differences in technical efficiency levels of these firms, and find that there existed slightly heterogeneous efficiency level in these firms across sub-industries and regions in the study period.

Keywords: small and medium firms; manufacturing; data envelopment analysis (DEA); stochastic frontier production function (SFPF); Spearman rank correlation coefficients; Vietnam (search for similar items in EconPapers)
JEL-codes: C14 L60 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (3)

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