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Efficiency of Construction Firms in Vietnam

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  • Nguyen, Khac Minh
  • Giang, Thanh Long

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.

Suggested Citation

  • Nguyen, Khac Minh & Giang, Thanh Long, 2005. "Efficiency of Construction Firms in Vietnam," MPRA Paper 968, University Library of Munich, Germany, revised Nov 2006.
    • Handle: RePEc:pra:mprapa:968
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    References listed on IDEAS

    as
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    2. Kumbhakar, Subal C., 1990. "Production frontiers, panel data, and time-varying technical inefficiency," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 201-211.
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    5. Wadud, Md. Abdul., 2003. "Technical, Allocative, and economic efficiency of farms in Bangladesh: a stochastic frontier and DEA approach," Journal of Developing Areas, Tennessee State University, College of Business, vol. 37(1), pages 109-126, September.
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    Cited by:

    1. Mohammed, Rezgar & Saghaian, Sayed, 2014. "Technical Efficiency Estimation of Rice Production in South Korea," 2014 Annual Meeting, February 1-4, 2014, Dallas, Texas 162231, Southern Agricultural Economics Association.
    2. James A. Giesecke & Tran Hoang Nhi, 2009. "Sources of Growth and Structural Change in the Vietnamese Economy, 1996–2003: A Computable General Equilibrium Analysis," Asian Economic Journal, East Asian Economic Association, vol. 23(2), pages 195-224, June.
    3. Le, Viet & Vu, Xuan-Binh (Benjamin) & Nghiem, Son, 2018. "Technical efficiency of small and medium manufacturing firms in Vietnam: A stochastic meta-frontier analysis," Economic Analysis and Policy, Elsevier, vol. 59(C), pages 84-91.
    4. Ren-Jye Dzeng & Jih-Shong Wu, 2013. "Efficiency measurement of the construction industry in Taiwan: a stochastic frontier cost function approach," Construction Management and Economics, Taylor & Francis Journals, vol. 31(4), pages 335-344, April.
    5. Zhao Yang & Hong Fang, 2020. "Research on Green Productivity of Chinese Real Estate Companies—Based on SBM-DEA and TOBIT Models," Sustainability, MDPI, vol. 12(8), pages 1-16, April.

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    More about this item

    Keywords

    construction firms; data envelopment analysis (DEA); stochastic frontier production function (SFPF); Tobit regression; Vietnam;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction

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