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Efficiency of Construction Firms in Vietnam

Khac Minh Nguyen and Long Giang

MPRA Paper from University Library of Munich, Germany

Abstract: This paper uses both parametric and non-parametric approaches to estimate technical efficiency for 2,298 construction firms in Vietnam in the database of the 2002 Economic Census for Enterprises by the General Statistics Office of Vietnam (GSO). It is found that results from both approaches are consistent, and they could help explain the performance efficiency of these firms. Estimates from the non-parametric approach (data envelopment analysis [DEA] model) and the parametric approach (stochastic frontier production function [SFPF] model) indicate that the average pure technical efficiency of these firms was about 60 percent (58.6% and 57.8% for DEA and SFPF, respectively). Models to test the factors influencing efficiency scores in both approaches show relatively similar results that state firms were more efficient than non-state ones, and location in Hanoi and Ho Chi Minh city did have impacts on efficiency scores. However, exploration of the net capital-labor ratio variable show that it did not influence efficiency scores in the DEA model, while it had clear influence in the SFPF model.

Keywords: construction firms; data envelopment analysis (DEA); stochastic frontier production function (SFPF); Tobit regression; Vietnam (search for similar items in EconPapers)
JEL-codes: C14 L74 (search for similar items in EconPapers)
Date: 2005-01, Revised 2006-11
New Economics Papers: this item is included in nep-eff and nep-sea
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Forthcoming in Nguyen Khac Minh and Giang Thanh Long (eds.), Technical Efficiency and Productivity Growth in Vietnam: Parametric and Non-parametric Analyses (2007): pp. 44-59

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https://mpra.ub.uni-muenchen.de/968/1/MPRA_paper_968.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/2872/1/MPRA_paper_2872.pdf revised version (application/pdf)

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