Dimensions of entrepreneurship in Vietnam: Institutions, economic growth, education and risk preferences

Abstract

Entrepreneurship is an intangible concept that is linked with a lot of other business activities and can be analyzed in multi-level from individual to firm to macro level. The goal of this dissertation is to explore entrepreneurship at both macro level and micro level and fill some main gaps in existing literature and empirical context of Vietnam. At macro level, the dissertation investigates the nexus between institutions and entrepreneurship and its impact on economic growth. At micro level, the dissertation examines the influence of risk preference and education on entrepreneurial decision-making. Especially, this dissertation uses dual approaches to examines the relationship between education and entrepreneurship in Vietnam on two distinct levels: at the provincial level and household level. At macro level, by utilizing the GMM 3SLS estimator for panel data and simultaneous equations to investigate the relationship between institutions and entrepreneurship, as well as the impact of entrepreneurship on economic growth in 63 provinces of Vietnam from 2012 to 2019, this dissertation aims to provide a rigorous and comprehensive analysis of the factors that contribute to successful entrepreneurship and economic growth in Vietnam. The results show that various institutional indicators such as Business support services, Labor quality, Transparency, Informal charge, Time costs, and Proactivity have significantly positive impacts on the entrepreneur dynamic. Remarkably, these institutional factors also have indirect effects on economic growth through entrepreneurship. At micro level, this dissertation investigates the relationship between risk preferences and entrepreneurial decisions within the Vietnamese context through controlled laboratory experiments. Specifically, the author examines whether individuals with higher levels of risk aversion are more likely to become fixed-wage employment, while those with a propensity for risk-taking are more likely to pursue entrepreneurial ventures. The findings underscore a significant relationship between risk aversion and the initiation of new businesses at the point of decision-making. Individuals exhibiting greater risk aversion demonstrate a decreased likelihood of venturing into entrepreneurship compared to their risk-taking or risk-neutral counterparts. Importantly, this relationship withstands variations in experimental measures of risk preferences, affirming its robustness across diverse contexts. These insights contribute to a deeper understanding of the role of risk attitudes in shaping entrepreneurial behavior and hold implications for policy interventions aimed at fostering entrepreneurship in Vietnam. At both macro and micro levels, this dissertation examines how education shapes and influences entrepreneurship in the Vietnamese context. The analysis in this paper operates on two distinct levels: at the provincial level, this study examines the broader view where education policies and infrastructure influence entrepreneurial activities, and at the household level, the author examines the individual choices in connection with their education within Vietnamese families. Leveraging the Vietnam Household Living Standard Survey (VHLSS) datasets spanning from 2012 to 2020, coupled with provincial-level data from the General Statistics Office (GSO), the study employs a fixed effects panel data analysis and logistic regression to investigate the impact of education on entrepreneurial activities. The findings of this research reveal evidence of the positive influence of education on entrepreneurship, both at the household and provincial levels. Notably, tertiary education emerges as a powerful catalyst for entrepreneurship within Vietnamese households, underscoring the importance of advanced learning in fostering entrepreneurial decisions. Furthermore, the paper identifies a significant correlation between a higher prevalence of university teachers and students within provinces and increased rates of entrepreneurship, highlighting the broader regional dynamics of educational impact on entrepreneurial ecosystems. This dissertation provides empirical evidence that enriches the existing literature about the dimensions of entrepreneurship such as institutions, economic growth, risk preferences and education in Vietnam - a transition economy- where entrepreneurial activity plays a vital role in the economic development process. It is crucial for policymakers to consider and prioritize these indicators to foster a conducive environment for entrepreneurship and, consequently, economic growth.