Boosting Productivity in Southeast Asia: Insights from MSMEs in Vietnam and Neig

Boosting Productivity in Southeast Asia

by Jacob Michael

This Book aims to measure firm-level labour productivity and technical efficiency using differenttechniques such as Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA). Itthen analyses the factors that drive firm technical efficiency or productivity, especially the interrelationshipbetween firm efficiency/productivity, corruption, government assistance, innovation, and gender. The study focuses on Micro, Small and Medium-sized Enterprises(MSMEs), which are considered a lifeblood of economies. This thesis consists of three studiesthat make use of two different datasets of MSMEs. The first two studies use biennial survey dataof manufacturing MSMEs in Vietnam covering four waves between 2009 and 2015. This dataresulted from collaboration between Danish and Vietnamese agencies. The third study utilisesWorld Bank cross-country data for manufacturing MSMEs in Vietnam, Indonesia, and thePhilippines in 2009 and 2015.The first study investigates the inter-relationship between corruption, government assistance andfirm efficiency for MSMEs in Vietnam. The study treats corruption, government assistance, andfirm efficiency as endogenous variables in order to control for feedback effects between them.There exist only a small number of firm-level studies on corruption and firm efficiency. Inaddition, this study investigates the role played by government assistance in this relationship.Two contending hypotheses are tested in the analysis. The first suggests that corruption enhancesfirm efficiency by helping to "grease-the-wheels". Under this hypothesis corruption aidsefficiency by overcoming bureaucratic obstacles. The second hypothesis, referred to as "sandthe-wheels", suggests that corruption reduces efficiency. The study finds a strong nexus betweenfirm efficiency, bribery, and government assistance. The effect of bribing on firm efficiency issignificantly positive, supporting the "grease-the-wheels" hypothesis. The study also finds thatgovernment assistance is effective in improving firm efficiency