The influence of institutional quality of firm size and number of non-state firm at province level in Vietnam

Abstract

The relationship between institutions and firm size is now well established. This paper investigates the influences of the institutional quality of local government on firm size and number of non – state firms by using the panel data of 52 provinces in Vietnam from the period 2009 to 2013. We use a unique dataset and ranking of provincial governance institutions from Vietnam as measure of the institutional quality. We deal with the endogeneity issue by using the distance from the 17th parallel as the instrument for the institutions variable. Interestingly, we find no evidences to clarify the relationship between the institutional quality, firm size and number of non – state firms at province level in Vietnam.