SMEs’ efficiency in a transitional economy: does innovation and public support schemes matter?

Anh-Tuan Doan, Aila Khan, Scott Holmes and Thao Tran

Journal of the Asia Pacific Economy, 2023, vol. 28, issue 3, 1029-1060

Abstract: This paper examines the effects of innovation performance and government support schemes on cost efficiency of Vietnamese small and medium enterprises (SMEs). Financial and technical assistances are two different public instruments used to correct market failure and facilitate efficient innovation through lowering the research and development (R&D) expenditures. Although large and small firms innovate in different ways, so far limited empirical evidence has been reported with respect to the effectiveness of innovation activities and public instruments for SMEs. Using stochastic frontier approach to estimate firm efficiency scores, we find that firms with new product innovation are associated with higher efficiency, but firms with introduced actions of existing product improvement, technology innovation, and new product lines are unable to achieve a higher efficiency level compared to their counterparts. Furthermore, the results suggest that government financial assistances used alone or with technical assistances are neither able to help firms to improve efficiency, nor to reduce the cost of SMEs’ innovation activities. This suggests that public instruments may have limited usefulness for SMEs in Vietnam.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/13547860.2021.1940693 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rjapxx:v:28:y:2023:i:3:p:1029-1060

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rjap20

DOI: 10.1080/13547860.2021.1940693

Access Statistics for this article

Journal of the Asia Pacific Economy is currently edited by Leong Liew

More articles in Journal of the Asia Pacific Economy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().