The impact of firm size on the performance of Vietnamese private enterprises: A case study

• Published in: Problems and perspectives in management Vol. 19; no. 2; pp. 243 - 250
• Main Authors: Vu Hung, Cuong, Phi Vinh, Tuong, Dang Thai, Binh
• Format: Journal Article
• Language: English
• Published: Sumy Business Perspectives Ltd 2021; LLC "CPC "Business Perspectives
• Subjects: enterprise development; firm performance; OLS model; PCI; Private enterprise; profitability
• ISSN: 1727-7051; 1810-5467
• DOI: 10.21511/ppm.19(2).2021.20

This article investigates the effect of firm size on the performance of Vietnamese private enterprises. Based on the data from the Annual Enterprise Survey from 2009 to 2018, this study uses an ordinary least-squares regression model (OLS) to point out the effects of firm size (growth rate, total assets, and total labor) on the performance of Vietnamese private enterprises in both static and dynamic states. According to the results of the quantitative model, total assets are the biggest factor for determining firm performance, followed by total labor and growth rate. The results highlight the issue in Vietnamese private enterprises development in terms of scale, despite the fact that their number is growing, as the scale of enterprises decreases (the proportion of micro and small enterprises increases, but the proportion of medium and big enterprises decreases). Besides, the disadvantages of scale also negatively affect the development process of Vietnamese private enterprises, including accessing capital, increase in production or productivity, business expansion, and improving competitiveness.
AcknowledgmentsThis research is supported by the National Science Project “Development of Private Enterprises in the Southwest Region in the new context” (KHCN-TNB/14-19/X15).