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Technical efficiency of manufacturing SMEs in a transitional economy: Evidence from Vietnam

Conference Paper


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.

Publication Date


  • 2010

Citation


  • Le, V. & Harvie, C. (2010). Technical efficiency of manufacturing SMEs in a transitional economy: Evidence from Vietnam. 55th International Council for Small Business Worl Conference (Entrepreneurship: Bridging Global Boundaries) (pp. 1-31). Washington DC: International Council for Small Business.

Start Page


  • 1

End Page


  • 31

Place Of Publication


  • http://www.icsb2010.org/

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.

Publication Date


  • 2010

Citation


  • Le, V. & Harvie, C. (2010). Technical efficiency of manufacturing SMEs in a transitional economy: Evidence from Vietnam. 55th International Council for Small Business Worl Conference (Entrepreneurship: Bridging Global Boundaries) (pp. 1-31). Washington DC: International Council for Small Business.

Start Page


  • 1

End Page


  • 31

Place Of Publication


  • http://www.icsb2010.org/