Technical efficiency of small and medium enterprises in manufacturing sector in Viet nam

Abstract

Most enterprises in Viet Nam is Small and medium enterprises (SMEs). In 2009 SMEs account for 98,54 percent in total enterprises in economy. So, this paper examines the technical efficiency of small and medium enterprises in manufacturing sector in Viet Nam. The paper concentrated on evaluating the technical efficiency of the firms. Then it identifies the determinant of technical efficiency in these small and medium enterprises. The data set collected from survey of Central Institute for Economic Management (CIEM), Department of education (DoE), and Institute of Labor Science and Social Affairs (ILSSA) in 2009 with 1.968 observations. This paper resulted in a high technical efficiency in 2009. Levels of technical efficiency ranged from 0.94 percent to 0.98 percent. Regarding factors influencing technical efficiency, the paper shows that only firm age and area have a positive relationship with technical efficiency. Others factor such as firm size, sub-contractor, competitor, enterprise launched new product and improve product have a negative relationship.