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Firm Performance in Vietnam:Evidence from Manufacturing Small and Medium Enterprises

Viet Le and Charles Harvie ()
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Charles Harvie: University of Wollongong

Economics Working Papers from School of Economics, University of Wollongong, NSW, Australia

Abstract: This paper examines the performance of domestic non-state manufacturing small and medium enterprises (SMEs) in Vietnam. Specifically, it evaluates firm level technical efficiency and identifies the determinants of technical efficiency of these SMEs. The paper uses an econometric approach based on a stochastic frontier production function to analyse 5,204 observations of SMEs from three surveys conducted in 2002, 2005 and 2007. The results from the estimations reveal that manufacturing SMEs in Vietnam have relatively high average technical efficiency ranging from 84.2 percent to 92.5 percent. The paper further examines the factors influencing efficiency. It finds that firm age, size, location, ownership, cooperation with a foreign partner, subcontracting, product innovation, competition, and government assistance are significantly related to technical efficiency, albeit with varying degrees and directions. Exporting does not appear to influence technical efficiency. The paper offers some evidence-based policy recommendations to improve the technical efficiency and competitiveness of manufacturing SMEs.

Keywords: manufacturing small and medium enterprises; firm performance; technical efficiency; stochastic frontier production function; Vietnam. (search for similar items in EconPapers)
JEL-codes: L1 L6 O1 O12 O14 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2010
New Economics Papers: this item is included in nep-cse, nep-eff, nep-ent, nep-sbm and nep-tra
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