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Local Entrepreneurship in Vietnam’s Rural Transformation. A Case Study from the Mekong Delta

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  • Benedikter, Simon
  • Waibel, Gabi
  • Birtel, Serge
  • Bui, Cuong The
  • Tran, Be Thanh
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    Abstract

    Empirical evidence from developing countries has illuminated the vital role private business development plays in rural transformation and the creation of off‐farm livelihoods. Since ‘renovation’ (Đổi mới) was promulgated by the Vietnamese Communist Party in 1986, Vietnam has experienced rapid growth and development through the transition from state to market. While de‐collectivization and the return to householdbased rural production reduced poverty and increased growth, entrepreneurship development in the form of Small and Medium Enterprises(SME) has emerged as a strong agent for socio‐economic diversification. The Mekong Delta, located in the Southwest of Vietnam, is a rural setting traditionally reliant on agriculture but has been facing rapid rural transformation over the past three decades. Against a background of agrarian modernization, economic liberalization, international integration and environmental change, this report explores the diversity of entrepreneurial activities and SME development in typical peri‐urban and rural settings of the region. Empirical findings on the trajectory of rural entrepreneurship development, enterprise characteristics, and the social profiles of business owners are presented. Beyond that, changes brought about by rural enterprises for livelihood diversification, social security and labor market dynamics are disaggregated and discussed by different business types and corresponding modus operandi (growth‐oriented vs. livelihood‐oriented enterprises). Finally, the results are contrasted with current government notions of promoting SMEs development as a driver of economic growth. Diverging from the government’s vision for boosting SME development in the context of rural industrialization, the large majority of private business establishments in the Mekong Delta are micro‐enterprises which operate at subsistence levels, while growth‐oriented SMEs remain the exception. Consequently, there is a need to reconsider policy formulation for more sustainability in the rural SME sector.

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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 49866.

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    Date of creation: Sep 2013
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    Handle: RePEc:pra:mprapa:49866

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    Keywords: Entrepreneurship development; SME; rural transformation; Mekong Delta; Vietnam;

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    1. Oostendorp, Remco H. & Trung, Tran Quoc & Tung, Nguyen Thanh, 2009. "The Changing Role of Non-Farm Household Enterprises in Vietnam," World Development, Elsevier, vol. 37(3), pages 632-644, March.
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    12. Mead, Donald C. & Liedholm, Carl, 1998. "The dynamics of micro and small enterprises in developing countries," World Development, Elsevier, vol. 26(1), pages 61-74, January.
    13. Thanh Hai Nguyen & Quamrul Alam & Daniel Prajogo & Nazmul Amin Majumdar, 2009. "Public Policy For The Development Of Private Sector And Smes In A Socialist Market Economy," Journal of Academic Research in Economics, Spiru Haret University, Faculty of Accounting and Financial Management Constanta, vol. 1(1 (June)), pages 79-92.
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