Use of the stochastic frontier approach to assessing the impacts of ownership structure on the efficiency of the construction industry in vietnam

Abstract

The study assessed the impacts of ownership structure on construction enterprises' technical efficiency in Vietnam using a stochastic frontier approach. The results showed that the construction industry's technical efficiency in 2012-2017 was 55.73 percent on average. The study also showed that the ownership structure had an inverse relationship to technical efficiency. It indicated that the more equity an enterprise uses, the less efficient its operation was. Also, the private enterprise and foreign-invested enterprise sectors were less efficient than the state-owned enterprise sector; initial capital per worker had an inverse impact on technical efficiency, which may be because enterprises had applied for scientific and technological advances but had not yet used that technology effectively, leading the unexpected results. The study proposed several solutions to improve construction enterprises' performance in the future.