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Enterprise Growth and Survival in Vietnam: Does Government Support Matter?

  • Henrik Hansen
  • John Rand
  • Finn Tarp

This paper analyses whether direct government assistance during start-up and other forms of interaction with the state sector have influenced the long-run performance of small and medium-sized manufacturing enterprises (SMEs) in Vietnam. Using three partly overlapping surveys during the period 1990-2000, we find strong effects on firm dynamics from interaction with state institutions. Enterprises which have the state sector as their main customer perform better. This is so for both survival and growth. Moreover, temporary tax exemptions during firm start-up had a separate and positive influence on long-run growth for non-household enterprises and initial credit support seems to benefit rural firms.

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File URL: http://hdl.handle.net/10.1080/00220380902811025
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Article provided by Taylor & Francis Journals in its journal The Journal of Development Studies.

Volume (Year): 45 (2009)
Issue (Month): 7 (August)
Pages: 1048-1069

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Handle: RePEc:taf:jdevst:v:45:y:2009:i:7:p:1048-1069
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  1. Carol Newman & John Rand & Finn Tarp, 2007. "Sector Switching: An Unexplored Dimension of Firm Dynamics in Developing Countries," The Institute for International Integration Studies Discussion Paper Series iiisdp230, IIIS.
  2. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
  3. Richard Ericson & Ariel Pakes, 1995. "Markov-Perfect Industry Dynamics: A Framework for Empirical Work," Review of Economic Studies, Oxford University Press, vol. 62(1), pages 53-82.
  4. Iqbal, Farrukh & Urata, Shujiro, 2002. "Small Firm Dynamism in East Asia: An Introductory Overview," Small Business Economics, Springer, vol. 18(1-3), pages 1-12, Feb.- May.
  5. James Tybout, 1998. "Manufacturing Firms In Developing Countries: How Well Do They Do, And Why?," Development and Comp Systems 9805004, EconWPA.
  6. Pablo Fajnzylber & William F. Maloney & Gabriel V. Montes-Rojas, 2009. "Releasing Constraints to Growth or Pushing on a String? Policies and Performance of Mexican Micro-Firms," Journal of Development Studies, Taylor & Francis Journals, vol. 45(7), pages 1027-1047, August.
  7. Richard E. Caves, 1998. "Industrial Organization and New Findings on the Turnover and Mobility of Firms," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 1947-1982, December.
  8. Soderbom, Mans & Teal, Francis & Harding, Alan, 2006. "The Determinants of Survival among African Manufacturing Firms," Economic Development and Cultural Change, University of Chicago Press, vol. 54(3), pages 533-55, April.
  9. Hehui Jin & Yingyi Qian, 1998. "Public Versus Private Ownership of Firms: Evidence from Rural China," The Quarterly Journal of Economics, Oxford University Press, vol. 113(3), pages 773-808.
  10. Stoyan Tenev & Amanda Carlier & Omar Chaudry & Quynh-Trang Nguyen, 2003. "Informality and the Playing Field in Vietnam's Business Sector," World Bank Publications, The World Bank, number 15084.
  11. John Sutton, 1997. "Gibrat's Legacy," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 40-59, March.
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