DOES GLOBAL VALUE CHAIN PARTICIPATION IMPROVE TECHNICAL EFFICIENCY OF SMES? EVIDENCE FROM VIETNAM

Kien Do, Huong Giang, Le Huy () and Nguyen Thuy
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Kien Do: FTU - Foreign Trade University, Hanoi, Vietnam
Huong Giang: FTU - Foreign Trade University, Hanoi, Vietnam
Le Huy: FTU - Foreign Trade University, Hanoi, Vietnam
Nguyen Thuy: FTU - Foreign Trade University, Hanoi, Vietnam

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Abstract: This study disentangles the relationship between GVC participation and the technical efficiency of SMEs in Vietnam. We combine panel data obtained from the GSO Enterprise Census survey of SMEs in Vietnam including 567,866 enterprises observations from 2015 to 2018. Regarding global value chain participation (GVC), TiVA databases by OECD are used to track GVC integration at sectoral level. We employ Stochastic frontier analysis (SFA) to gauge the relationship between a firm's technical efficiency and GVC participation in two modes of participation: backward integration and forward integration. The findings show the positive impacts of backward participation in rising technical efficiency levels. However, SMEs in sectors with deeper forward participation tend to have low technical efficiency. We find the heterogeneity in firm efficiency regarding firm-specific factors and location.

Keywords: GVC participation; SMEs; Technical efficiency (search for similar items in EconPapers)
Date: 2023-10
New Economics Papers: this item is included in nep-cse, nep-dev, nep-eff, nep-int, nep-sea and nep-tra
Note: View the original document on HAL open archive server: https://hal.science/hal-04528712
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Published in 2nd Vietnam Symposium in Supply Chain Management, AVSE Global; Thuongmai University, Oct 2023, Hanoi, Vietnam

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04528712

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