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State ownership, formality status and technical efficiency: evidence from Vietnamese SMEs

Author

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  • Nguyen-Thi-Kim Nguyen
  • Tiet Tuyen
  • Nguyen-Anh Tuan
  • Nguyen-Anh Thu
  • Nguyen-Quoc Viet
  • To-The Nguyen

Abstract

Small and medium-sized enterprises (SMEs) are critical in a rapidly growing economy like Vietnam, which requires significant government assistance. Our analysis begins by examining the technological efficiency of enterprises utilising data from Vietnamese SMEs from 2017 to 2018. We then examine the effects of formality status and state ownership as a proxy for political ties on the technical efficiency of SMEs in Vietnam. We found that policies should reduce cronyism in firm-state relationships to incentivise firms to invest in improving productivity. Moreover, to boost productivity, it is critical to promote formalisation by raising the number of legally registered businesses, the level of tax registration, and the number of formal labour contracts.

Suggested Citation

  • Nguyen-Thi-Kim Nguyen & Tiet Tuyen & Nguyen-Anh Tuan & Nguyen-Anh Thu & Nguyen-Quoc Viet & To-The Nguyen, 2023. "State ownership, formality status and technical efficiency: evidence from Vietnamese SMEs," International Journal of Management and Enterprise Development, Inderscience Enterprises Ltd, vol. 22(1), pages 25-44.
    • Handle: RePEc:ids:ijmede:v:22:y:2023:i:1:p:25-44
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    Cited by:

    1. Tran, Quoc Trung & Nguyen, Van Phong & Dang, Duong Huy Chuong & Nguyen, Ba Phong & Le, Phuong Linh, 2023. "Local corruption and capital structure," Finance Research Letters, Elsevier, vol. 55(PB).

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