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Domestic quality certification and growth of Vietnamese MSMEs

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  • Calza, Elisa

    (UNU-MERIT)

  • Goedhuys, Micheline

    (UNU-MERIT)

Abstract

Using two waves of the Mirco, Small and Medium sized Enterprises (MSMEs) survey of Vietnamese manufacturing firms, this paper first explores what drives firms' decision to have a domestically recognized certificate, taking into account a rich number of factors related to the cost and expected benefits of certification as well as institutional factors. It further explores the presence of a positive and significant effect of domestic certificates on firm growth, these serving as signaling devices for desirable attributes under information asymmetry and thus leading to an increase in legitimacy and reputation. Evidence is indeed found for a signaling effect of certification, this being stronger for more recently adopted certificates, for advertising firms and for women entrepreneurs.

Suggested Citation

  • Calza, Elisa & Goedhuys, Micheline, 2018. "Domestic quality certification and growth of Vietnamese MSMEs," MERIT Working Papers 2018-026, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2018026
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    More about this item

    Keywords

    Certification; Firm growth; Transaction costs; Signaling Emerging economies; Viet Nam;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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