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What are the characteristics of an efficient firm in developing countries' private sector? The case of Vietnam

Linh Pham
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Linh Pham: University of Central Oklahoma, United State

Journal of Economic Development, Environment and People, 2018, vol. 7, issue 2, 37-55

Abstract: The private sector is the primary source of local development in developing countries. Previous research in developing countries has documented many factors contributing to firm-level efficiency. However, which of these factors are most likely to correlate with efficiency? This paper studies the relative importance of the firm-level efficiency determinants in a transitional economy, using a firm-level panel dataset in Vietnam between 2005 and 2015. The empirical results show that firm-specific production and labor characteristics are the most significant determinants of efficiency. Thus, firms actively seeking to improve their own production process and labor force can be well-rewarded. Moreover, government technical supports and human resource training programs, combined with anti-corruption efforts, are beneficial for firm-level efficiency, thereby improving the living standards in developing economies.

Keywords: efficiency; SMEs; transitional economy; efficiency; SMEs; transitional economy (search for similar items in EconPapers)
JEL-codes: D2 L2 O25 (search for similar items in EconPapers)
Date: 2018
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