SSE/EFI Working Paper Series in Economics and Finance,
Stockholm School of Economics

Abstract: In the course of economic reforms in vietnam the emrging private sector has steadily moved forward in terms of number of interprise units in total, output value and employment generation. Small-scale enterprises, mainly established to create employment opportunities for the owner and his family, decisively contribute to this promising development. The current legal infrastructure, the banking system and supporting programmes provide the necessary backing for private investment but are only partly adequate to the needs of especially small business units. Most of them have to cope with manifold problems like capital shortage and difficulties in marketing (only to mention the most important ones) and are forced to remain small. By means of selected indicators (employee structure, turnover, machinery equipment), surbey results inform about the current development level of small-scale industries in Hanoi, Haiphong and Hong Gai and the view of the entrepreneurs as regards credit policy and marketing. The employment effect of the enterprises surveyed is modest: on average ten employees per interprise unit (household members included). A comparison between the settings reveals Haiphong as the most prosperous location, whereas an analysis of the different legal forms covered by the survey shows that the smaller business units (small-scale/household industries, production groups) are much worse off than the registered private enterprises and companies.

Keywords: Private enterprise; small scale industries; Vietnam model

JEL-codes: O12; O14; O17

44 pages, May 1995

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