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Technical Efficiency of Small And Medium Manufacturing Firms in Vietnam: Parametric and Non-Parametric Approaches

Author

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  • Nguyen Khac Minh

    (National Economics University)

  • Giang Thanh Long

    (National Economics University)

  • Bach Ngoc Thang

    (National Economics University)

Abstract

There is evidence that small and medium firms usually do not have high productive efficiency. This phenomenon can be explained by several factors. In this paper, it is analyzed by using the panel data of 1,492 firms from the Economic Census for Enterprises conducted by the General Statistics Office of Vietnam (GSO) during the period 2000-2003 with a parametric approach (based on stochastic frontier production function-SFPF) and a nonparametric approach (based on data envelopment analysis-DEA). Under the specification of variable return to scale (VRS), the mean technical efficiency of these small and medium firms was about 50 percent under the SFPF approach, and about 40 percent under the DEA approach. We also explore possible factors determining the differences in technical efficiency levels of these firms, and find that there existed slightly heterogeneous efficiency level in these firms across sub-industries and regions in the study period.

Suggested Citation

  • Nguyen Khac Minh & Giang Thanh Long & Bach Ngoc Thang, 2007. "Technical Efficiency of Small And Medium Manufacturing Firms in Vietnam: Parametric and Non-Parametric Approaches," Korean Economic Review, Korean Economic Association, vol. 23, pages 187-221.
    • Handle: RePEc:kea:keappr:ker-200706-23-1-09
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    References listed on IDEAS

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    Cited by:

    1. Nguyen Khac Minh & Giang Thanh Long, 2008. "Factor productivity and efficiency of the Vietnamese economy in transition," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 15(1), pages 93-117, June.
    2. Padmavathi N, 2019. "Technical efficiency of unorganised food processing industry in India: A stochastic frontier analysis," Working Papers 449, Institute for Social and Economic Change, Bangalore.
    3. Souksavanh VIXATHEP & Nobuaki MATSUNAGA, 2015. "Entrepreneurial Human and Social Capital in Small Businesses in Vietnam - An Extended Analysis -," GSICS Working Paper Series 29, Graduate School of International Cooperation Studies, Kobe University.

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    More about this item

    Keywords

    small and medium firms; manufacturing; data envelopment analysis (DEA); stochastic frontier production function (SFPF); Spearman rank correlation coefficients; Vietnam;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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