Scandinavian Working Papers in Economics

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

No 252: The Private Manufacturing Sector in Vietnam 1991-97: An Analysis of the Deceased

Bhargavi Ramamurthy
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Bhargavi Ramamurthy: Dept. of Economics, Stockholm School of Economics, Postal: P.O. Box 6501, S-113 83 Stockholm, Sweden

Abstract: Vietnam has witnessed a dynamic restructuring of its non-state enterprises since the initiation of market reforms in the late 1980s. Based on the results of 371 private sector enterprises surveyed in 1991 and 1997, this paper analyses the transformation of one category of resurveyed enterprises with the highest growth - the deceased, in the period 1990-91. The performance of these deceased enterprises are examined, separately for urban and rural, in terms of various internal and external determinants to the survival and growth of firms. These include organisational form, line of activity, enterprise history, entrepreneurial characteristics, scale of operations, employment, linkages - forward, backward and horizontal; production relations, continuity of operations, government assistance etc. The reasons for closure and the present occupation of former entrepreneurs are discussed as well. High initial investments combined with low labour content, poor linkages, credit and the easy entry into the private sector seem to have driven the units into an early demise.

Keywords: Small scale industries; private sector development; Vietnam

JEL-codes: J31; L11; L60

53 pages, August 31, 1998

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