Vietnamese enterprise: application of stochastic frontier production function

Abstract

With an application of the stochastic frontier production function based on cross sectional panel data, the findings show evidence of technical progress, it plays a significant role of firm performance. In addition, although returns to scale (RTS) of enterprises during 2000-2010 is the increasing RTS, this achievement is different in regions placed in Vietnam, which the Central Highlands, the Southeastern, and the Mekong River Delta are the scale of economics. It means that an increase in the scale of production gives a rise in certain benefits to the producers. While the Red River Delta, Northern Midland and Mountain, North Central and Central Coastal Areas are not the scale of production,this shows a limit to the scale of production for these three regions, due to economics of scale are exhausted and diseconomies. Moreover, total factor productivity also confirmed that the Mekong River Delta, the Southeastern, and the Central Highlands are good, while others region are opposite. With what found and mentioned above, policies of the government toward enterprises should be clarified, because each region has different conditions of geography and natural resources. Such the Mekong River Delta, mostly products are agricultural, so a policy of the government that once levels on all regions in nationwide is not really appropriate