Institutions matter: The case of Vietnam

Abstract

The paper investigates institutional reforms in Vietnam and their impact on the economic performance of firms. Using the provincial competitiveness index 2006 (PCI06) and firmlevel data in Vietnam in 2005, the results show that provincial competitiveness is economically and statistically significant in explaining cross-province differences in firm performance. We find that a one percentage point improvement in government practice could increase the daily value-added of an average firm by an amount equivalent to nearly three times per capita GDP per day. The results show that an improvement in providing market information, more secure land tenure and labor training assistance has a positive effect on firm performance. By contrast, weaknesses in the judiciary system and administrative reforms impede growth of non-state firms. The findings indicate that governance is an important obstacle to the development of the non-state sector in Vietnam.

Integrated View of Inter-Firm Cooperation: An Empirical Study in Tourism Region

“…8;2015 referents and other firms toward cooperation show higher cooperative intentions. From the view of cultural dimensions proposed by Hofstede (2001), these findings are consistent with collectivistic cultures like Chile and Vietnam in which citizens in these countries emphasize the co-dependency between individuals and their groups (Nasco et al, 2008;Tran et al, 2009). Fourthly, perceived control contributes to facilitate cooperation decision indirectly through cooperative intention.…”

Sub-national institutions, firm strategies, and firm performance: A multilevel study of private manufacturing firms in Vietnam

“…In emerging economies, local government officials differ greatly in their commitment and ability to create policies that are transparent and facilitate the information flow to support SMEs (Bertolini & Giovannetti, 2006;Meyer & Nguyen, 2005;Tran et al, 2009). Officials who appreciate the generation of new ideas and innovation have tried to make business information available to private businesses.…”

“…The information channels include provincial Websites, publications, regular meetings with entrepreneurs, and public channels such as television stations and newspapers. While the number of channels and quantity of information may vary, the common principle in these provinces is to make policies transparent and consistent, and to make information as available as they can to promote more new firms and new business ideas (Tran et al, 2009;VNCI-VCCI, 2006). In contrast, some provinces are less committed to improving policy transparency and information availability for SMEs.…”

“…Weaknesses in its formal institutions remain major obstacles for business (Nguyen, 2005a;Tran, Grafton, & Kompas, 2009). Recent studies in the country suggest that provincial institutions vary greatly (Meyer & Nguyen, 2005;VNCI-VCCI, 2006).…”

Vietnam and Entrepreneurial Private Enterprises

“…In a recent study, Tran, Grafton, and Kompas (2009) argue that market information, land tenure, and labor training institutions have a positive effect on firm performance. Further, Nguyen et al (2009aNguyen et al ( , 2009b highlight the critical role of government in encouraging the growth of entrepreneurial private ventures through creation of favorable market conditions and resource infrastructure.…”