ECONOMIC RESEARCH CENTERDISCUSSION PAPER

No.154

Small and Medium Enterprises in Thua Thien Hue
Province, Central Vietnam: Analysis of theSurvival and Growing CasesbyTran Van Hoa

July 2005

ECONOMIC RESEARCH CENTERSCHOOL OF ECONOMICSNAGOYA UNIVERSITY

ECONOMICS RESEARCH CENTER DISCUSSION PAPER

Small and Medium Enterprises in Thua Thien Hue Province,
Central Vietnam: Analysis of the Survival and Growing CasesbyTran Van Hoa∗∗

Visiting Fellow (From October 2003 to March 2004), Economic Research Center,
School of Economics, Nagoya University, School of Economics, Hue University.

I would like to express my gratitude to Professor Takeuchi Johzen who courteously
invited me to work on this paper at the Economic Research Center. I would also like tothank Professor Hirakawa, the director of the Center and all of the staff members who
help me during my studying.

Abstract
This study analyses the dynamism and its characteristics of small enterprises in theprovince of Thua Thien Hue, central part of Vietnam. It focuses on the analysis of thegrowing and the surviving enterprises during period 1995-2002. It turns out that among
a cohort of enterprises resurveyed, 105 enterprises have been closed down, 50
enterprises were declined, 9 enterprises were stagnated, and 46 enterprises weregrowing in 2002. The dynamism of the small enterprises has shown in thetransformations of their ownership forms, economic sectors, major characteristics of theowners/managers, economic performance and their linkages to the markets as well as
the inter-firm linkages. The typical entrepreneurs representing the survival enterprises
are male, between 41 to 60 years old with primary and secondary educational
background and past experiences as a farmer and worker in other economic activities.
On the other hand, the typical entrepreneurs representing the fast growing enterprises
are male, between 31 to 50 years old with secondary and high school educational
background and previous experiences as framers and workers in the other economic
activities. The study also shows that the small enterprises are less likely to survive in theurban areas than in the rural ones. The younger the owners/managers, the better thesurvival enterprises are found in this study. The educational background ofowners/managers has inverse relation and insignificant to the survival enterprises. The
past experience of the entrepreneurs has a positive and significant impact on thesurvival of the small enterprises. The scale of enterprises measured by total capital has apositive and significant relation to the enterprises survival.

1

I.

Introduction

Although research on the dynamism of small and medium-size enterprises (hereafterSMEs) has a long tradition in the economic literatures, the discussions among
researches on determinants of their growth and survival have not ended. In particular,
this matter becomes serious, since the primary data in the sector of small and medium
enterprises in most developing countries are not available. The primary sources of
database and empirical study about SMEs in the Vietnamese economy are notexceptional case. Especially, its economic structure has been drastically changed since
the initial introduction of renovation policy, which has been well known as ‘Doi Moi’since the late 1980s. The major concerns of this reform are assigned to the embryonicnon-state industrial sector in generating employment, incomes, growth, and bringing the
new dynamic trends from SMEs to the whole national economy. This study focuses on
the dynamism of the small enterprises in the province of Thua Thien Hue, central part ofVietnam, during the period 1995 – 2002.
The aims of this paper are focused on the survival and growing enterprises to draw out
the major determinants for their growth and survival. This study sheds light on several
questions: Why some enterprises continue to survive and others have to close down
their business? Which factors determine the growth of the small enterprises? Which are2the major characteristics of the enterprises dynamism?
This paper proceeds as follows. Section 2 briefly reviews the past literature on studying
approaches of the SMEs sectors and theory of their survival and growth. Section 3
presents the process of data collections of the small and medium enterprises in Thua
Thien Hue province. Section 4 describes the main characteristics of the survival and fast
growing enterprises. Section 5 and 6 discuss the determinants of surviving and growing
enterprises. The last section is conclusion and remarks.

II.

Literature review

The economic literatures have plentiful of debates on the various approaches forstudying small and medium scale enterprises. There are three common approaches forstudying small enterprises (J. Rasmusen et al, 1992).
First, the cross-section approach considers small enterprises as a “sector” and neglects
the relation to agents outside the “sector”. Second, the branch-specific studies or a
sub-sector approach (Boomgard et al, 1992), this concentrates on the small enterprises’
position in relation to suppliers of inputs, distributors of output and large competitors.
This approach is widely recognized and requires further elaboration (Harris, 1990).
Third, the flexible specialization approach includes four significant aspects to thesub-sector approach. There are location variable; socio-cultural factors; local institution

3

factor and other factors outside the impact of economic, political and socio-cultural
structures (J. Dawson, 1992).
The flexible specialization approach is now widely applied to study small and medium
size enterprises not only in the developed countries but also in the developing countries.
In the framework of this study some non-economic variables, such as educational
background of the entrepreneurs, age, gender, sectors, and enterprises location are also
included. However, for the small enterprises, the success and failures are not always
explained by the economic factors as well as the political and socio-cultural structures.
Recently, many researchers pay their attentions to the real contribution of small andmedium size enterprises and their dynamism in the current market situation. There are
two common trends of SMEs in most East Asian countries. Firstly, they remained theirown status or become more important in the whole economy as their role is measured
by their contribution of employment and value added. Secondly, the role of microenterprises (those with less than 10 workers) has the trend to decline (Igbal, F. et al,2002). The other characteristic of the dynamism of SMEs is their role as the absorptionof the economic shocks. However, there were diverse results from the studies of the
impact of Asian Crisis in 1997 on employment in small and medium size enterprises.
For example, in the cases of Thailand and Indonesia, a relatively higher share of small
enterprises has fewer workers after the crisis. Wiboonchutikula studied the shocks

4absorption of SMEs in Thailand and concluded that employment growth among smaller
enterprises rises at a faster rate than overall industrial growth (Wiboonchutikula, 2002).
On the other hand, in two cases of Korea and Malaysia, reported the opposite result, that
is, a smaller share of small enterprises had fewer workers after the crisis.
The total factor productivity performance of small enterprises is also considered interms of their dynamic transitions. Urata and Kawai studied TFP and growth by firm
size for the manufacturing sector in Japan from 1966 to 1996, they concluded that
smaller firms (with less than 100 employees) shows positive levels of TFP growththroughout the three decades (Kawai, H. et al, 2002). The similar relation between TFPlevels and firm size is also found in the research of Aw for Taiwan enterprises. He findsthat the relationship is much higher in going from micro-size firms (with less than 5
workers) to small size firm (with between 5 to 99 workers) than in going beyond to
medium (100-299 workers) and large (over 300 workers) firms (Aw, 2002). In the caseof China, Wang and Yao report that small enterprises have had a higher growth rate of
TFP in the period 1981-95 than larger ones, but the average TFP level of small
enterprises remains lower (Wang and Yao, 2002).
The innovation is another characteristic of the dynamism of small and medium
enterprises. In general, it was the common understanding that large corporations weregood at innovation because their large scale made it possible to have additional5

investment in R&D. Indeed, there are very little statistical data on this problem in thedeveloping countries. The measures of patent rate by firm size is one of the
distinguished measures for innovation outputs, and now available for several developed
countries. Audretsch studies the innovation process of small and medium enterprises in
the United State, and finds that large firms have most of the innovations in suchindustries as aircraft and pharmaceutical products, small enterprises have a higher rateof innovation in such industries as computer soft wares, process control instruments,
and plastics products. Urata and Kawai examine the innovation rates of SMEs in Japan,
they report that larger firms are more likely to participate in R&D activities.
Nevertheless, smaller enterprises seem to be as active as larger ones in obtaining R&Dfrom various sources.
In the economic literatures, many researchers have paid special attentions on the growthand survival issues of small enterprises. In spite of the various studies about growth in
the fifties’, it has been difficult to identify current specific theoretical outlines or a list of
conditioning factors (Rodriguez, A.C., et al, 2003). There are four common theories thatthe most economists have widely recognized for studying the growth of the firms. First,
the Classical Economic Theory indirectly studied growth as a change between two
situations of balance within the production theory, concentrated on the search for
optimum size and on the modeling of investor behavior (Chenery, 1952 and Jorgeson,61963). This theory proposed an inverse relation between growth and size, the smaller
enterprises growing more rapidly than larger ones. The second theory of the enterprises
growth is well known as the Behaviorist approach. The founders for this theory were
Baumol (1959, 1962), Penrose (1962, 1995) and Marris (1964). They try to explain thecontinuous expansion of the large enterprises under the limits proposed by economic
efficiency, by working on the principle of the existence of a separation between thefunction of property and control, given that growth enable executives to gain a higher
degree of satisfaction for their individual objectives (Rodriguez, A.C, et al, 2003). The
third theory of firm growth is the stochastic approach. This theory dated back in 1931
when Gibrat put forward his Law of Proportional Effect, in which he states that the size
does not influence the growth. The growth is described as a random phenomenon,
resulting from several factors that act in a multiple fashion on the initial size of the firm.
Profitability, benefit, possibilities for market expansion, the executives’ aversion to risk
or industrial or political trends are some of the factors that interact to determine the firm
growth. Due to limitations or dissatisfactions of the random approach to explain the
dynamics of enterprise growth has recently given rise to a fourth approach. That is thelearning theory, where new theoretical models are developed that underlines theimportance of leaning for the organization and its executives, innovation and thecharacteristics of the activity sector. In these models, the explanatory variables such as

7

firm size and age, which includes the learning process of the executive and theorganization, and, in any case, constitutes an approximation to the life cycle of theenterprise. The Jovanovic’s Model (1982) explains the fastest growth of small firms
through the introduction of a mechanism of Bayesian learning, which steadily reveals
the differences in efficiency of the firm when the industry grows. The other empiricalevidence seems to support theses approaches, whereby growth and growth variability
show an opposite relation with firm age and size (Dunne, Roberts and Samuelson, 1989;
Evans, 1987a, b; Dunne and Hughes, 1994; and Farinas and Moreno, 1997; among
others). From the viewpoint of these different models, non of these approaches can beinterpreted with total satisfaction, since the reason why some enterprises grow andothers do not remains to be solved.

III.

Data collection

The origin of this study goes back to 1996 when the first baseline survey of micro andsmall-scale enterprises in Thua Thien Hue province was undertaken as a collaborative
effort between the Free University of Amsterdam, the Netherlands and the Faculty of
Economics Hue University. The project aims at supporting SMEs is the Micro andSmall Scale Enterprise Development (MASCED) project, financed by the Dutch
Inter-church Organization for Development Cooperation (ICCO). The final objective of8the MASCED project was concentrated on the establishment of a Center for the
Promotion of Micro and Small Scale Enterprises, which will give assistance to startingand growing small enterprises in Thua Thien Hue province.
Thua Thien Hue province is located in the north central Vietnam, one of the poorest
areas in the country. The province consists of eight districts and a city, approximately
150 communes, and almost 1,090,000 people. The first baseline survey conducted in
1996 of almost 914 SMEs in the whole province1. The sample was stratified over eight
districts and a city with seven sectors of economic activities (Table 1).
Table 1
Survey Sample by Sector and Geographical Location
S1

S2

A Luoi

4

9

Hue City
Huong Thuy
Huong Tra
Nam Dong
Phong Dien
Phu Loc
Phu Vang
Quang Dien
Total

28
8
15
4
32
21
6
6
124

73
17
38
14
43
44
11
11
260

Location

S3

32
24
20
4
6
7
10
6
109

S4

S5

S6

S7

Total

9

5

15

8

50

40
8
12
21
21
7
12
130

42
6
9
3
5
54
5
10
139

29
3
2
4
6
5
2
2
68

23
1
8
13
5
6
1
65

267
67
84
49
126
157
47
48
895

Note: S1 – Construction; S2 – Food processing; S3 – Hat making; S4 – Carpentry; S5 - Machinery
services; S6 – Clothing; S7 – Metal.

1

Among total sample of 914 enterprises surveyed, dismissed 19 sample from the final analysis because

they did not have enough answered, thus the total declined to 895 samples.

9

The survey also covered household enterprises as well as private enterprises,
cooperatives, and state-owned enterprises. The respondents were the persons who own
and run household enterprises, the active owners of private enterprises, the chairmen ofcooperatives, and the director of the state-owned enterprises. The main topics of thequestionnaires included prior information, respondent characteristics, enterprises
characteristics, bookkeeping, business planning, workforce, marketing, resources andprofits, taxes, assets and liabilities, contracts and environment.
In 1997 the second survey was carried out by MASCED with an assistance of Center for
Development Cooperation Services (CDCS), Free University Amsterdam on about 200
enterprises that have been already interviewed in the first survey. Questionnaires wereadopted those of the first survey, however this time two additional sections such as theimpact analysis and demand assessment were added to meet the main purposes of thestudy.
Continue to examine the development of small enterprises in the province the thirdround survey of these enterprises was carried out in 2002. The study was a productive
effort of collaboration between the Research Project of East Asian Industrialization
organized under the sponsorship of JSPS, and located at the School of Economics ofNagoya University and Regional Industrialization Project at the School of Economics of
Hue University. The sample of this survey was selected from the second round survey

10

of 241 small enterprises, which have already surveyed in 1996 and 18 enterprises
additional for the first time interview, covered in eight districts and Hue city. The
questionnaire was mainly adopted from that of the second round survey and added
several new topics to meet the major purposes of the study.
This paper, however, focused the analysis on the survival and growing enterprises fromthe first round survey in 1996 to the third round survey in 2002. Based on theirperformance, the enterprises were classified into deceased, declining, stagnant, growing
and fast growing categories. Apart from the enterprises that closed down, the surviving
categories were classified on annual growth rates of value added in the period
1995-2001. The rates were –2.6 percent or more; -2.5 to +2.5 percent; 2.6 to 10 percent
and more than 10 percent respectively for the declining, stagnant, growing and fast
growing categories.
In the following sections, we concerned with only the category of fast growing andsurviving enterprises. The fast growing category of enterprises is of which annual
growth rate of value added in excess of 10 percent in the period of 1995-2001. The
following sections of this paper contain an examination of the main characteristics andbehaviors of the fast growing enterprises, and the major determinants of survival andgrowth of enterprises.

11

Table 2
Distribution of Resurveyed Enterprises by Sectors and Performance in 1995-2001

S1

S2

S3

S4

S5

S6

S7

Total

Closed down

9

32

13

17

14

10

10

105

Declining
Stagnant
Growing
Fast growing
Total

7
1
4
4
25

10
2
6
7
57

19
1
2
1
36

6
1
2
4
30

3
2
3
21

3
2
3
3
21

2
2
1
4
19

50
9
20
26
210

Note1: The total number of resurveyed enterprises was 259, but the figures for computing value
added were not available for 31 surviving units and 18 units for the first time surveyed; hence
the total number come down to 210.
Note2: S1- Construction sector includes floor tiles, bricks, cement blocks, roof tiles; S2- Foodprocessing includes candy making, tofu/coy bean, cassava powder, fish sauce, rice pancakes; S3Hat making includes hats, conical hat; S4-Carpentry includes wood cutting, furniture making,fine art making; S5- Machinery services includes rental/doing service of tractors water-pumping
equipment, transportation means, paddy/root sorting machine, threshing means; S6- Clothing
composes of tailoring, embroidery, textile /det zeng; and S7- Metal composes of forging, castingand others.

However, the data on entire set of resurveyed, surviving enterprises will be presented
too, in order to have a perspective of the position of fast growing enterprises in relation
to all surviving enterprises. From this study, we expect to identify some crucial
determinants and characteristics of successful enterprises, in order to give suggestions
for policy making at local as well as national level for further supporting developmentof small enterprises.
IV.

Main characteristics of survival and growing enterprises

123.1 Changes in Ownership From and Sectors
Among total number of 259 enterprises have been surveyed in 2002, 105 enterprises
closed down in 2002 survey, 136 enterprises are surviving, and 18 enterprises surveyed
for the first time (excluded in this analysis). The figures in Table 3 show the changes in
the ownership form of the enterprises surveyed from 1996 to 2002. Among thesurviving enterprises, 98 enterprises (93.3 percent) were household and 7 (6.7 percent)private enterprises in 1996. Compare to 2002, 82.9 percent of all survival enterprises
retained their original ownership forms, while 17.1 percent changed.
Table 3
Changes in Ownership Form 1996 – 2002

2002

PrivatePartnershipHousehold

Total

1996
HouseholdPrivate
Total

Unit

%

Unit

%

Unit

%

Unit

%

8
1
9

8.2
14.3
8.6

4
0
4

4.1
0.0
3.8

86
6
92

87.8
85.7
87.6

98
7
105

100.0
100.0
100.0

The fast growing category had 19.2 percent of enterprises changed their original formsof ownership, 80.8 percent retained ownership forms in the period 1996-2002. Table 3
shows the dynamic transformations in private and household enterprises. The household
enterprises have moved up to the private and partnership form of organization,
respectively 8.2 percent and 4.1 percent, but almost 87.8 percent of them retained theoriginal form as in 1996. However, the private enterprises moved down to the13household of 6 units, accounted for 85.7 percent, and one unit (14.3 percent) retained an
old form. The change of private form of enterprises to a lower category reflects highmobility of transferring businesses during the renovation period. On the other hand, themovement to higher categories of the organizational form of enterprises recognized aprogress in the managerial as well as administrative environment for small enterprises at
the micro level during the survey period.
Table 4
Change in Sectors Period 1996-2002 (%)

2002

S1

S2

S3

S4

S5

S6

S7

Average

S1

90.91

0.00

0.00

0.00

9.09

0.00

0.00

10.48

S2
S3
S4
S5
S6
S7

0.00
0.00
15.38
21.43
9.09
0.00
15.24

95.24
4.17
0.00
28.57
0.00
0.00
23.81

0.00
95.83
0.00
0.00
0.00
0.00
21.90

4.76
0.00
84.62
0.00
0.00
9.09
12.38

0.00
0.00
0.00
50.00
0.00
0.00
7.62

0.00
0.00
0.00
0.00
90.91
9.09
10.48

0.00
0.00
0.00
0.00
0.00
81.82
8.57

20.00
22.86
12.38
13.33
10.48
10.48
100.00

1996

Total

Note: S1- Construction; S2- Food Processing; S3-Hat Making; S4-Carpentry; S5-Machinery
Services; S6-Clothing; S7-Metal

During the interview period of 1996-2002, dynamic transactions in the economic
activities have relatively been occurred in the small enterprises. Among the total
number of surviving enterprises until 2002, 14.3 percent of them changed theireconomic activities, while 85.7 percent reserved their old business. A breakdown an14

analysis on sector, the figures in Table 4 show different patterns of transforming an
economic activities between enterprises and sectors. In 1996, the 15,38 percent ofenterprises in carpentry, 21.43 percent in machinery services and 9,09 percent in
clothing moved to construction material sector in 2002. Similarly, 28.57 percent ofenterprises in machinery service and 4.17 percent in hat making shifted to foodprocessing in 2002. Also 4.76 percent of enterprises in food processing and 9.09 percent
in metal moved to carpentry sector; 9.09 percent of enterprises in construction materials
changed to machinery services; and the same percent of enterprises in metal sector
changed to clothing sector in 2002. Two sectors as hat making, and metal have no anytransactions from other economic activities. As a general rule, the transactions between
the economic sectors often occurred when the lower business performance sectors moveto the higher business perspective sectors. This is too early to conclude however thatduring the period from 1996 to 2002 two sectors such as hat making and metal seem tobe less attractive perceptions for the small business enterprises.
As expected, the process of transactions between the economic sectors was more
dynamism in growing and fast growing categories than the declining and stagnant one.
During the surveyed period, 19.23 percent of enterprises in growing category and 14.29
percent of fast growing have changed their economic activities, while only 10 percent of
declining and zero percent of stagnant categories. The more dynamic transformations in

15

economic activity the higher growth rate seem to be happened in small enterprises.

3.2 Enterprise history

The year of establishment and firm age reflect the stability and experience of enterprises.
Especially in the case of small business enterprises, being in the same lines of activity
fosters development of useful relations with other firms, government etc., and thebenefits of entrepreneurial experience in production as well as organizational matters in
the long run. Table 5 presents the age distribution of fast growing and all surviving
enterprises by year of establishment. It is not surprising from the figures that more than58 percent of enterprises were established in the era of renovation period after 1986. On
the other hand, close to 77 percent of fast growing enterprises were set up after 1986.
Less than 8 percent of enterprises surveyed in both all survival and fast growing were
set up after 1996.
As the second half of the table shows, about half of enterprises surviving fall in the
categories of five to ten years and eleven to fifteen years, which mean an equal amount
were very young at the time of the first survey in 1996. Related to the fast growing
enterprises, about 46 percent of them were established in the category from five to ten
years, and 23.1 percent in the next category from eleven to fifteen years. This alsomeans that the younger enterprises the higher economic performance in terms of annual

16

growth rate in value added.
Table 5
Year of establishment and firm age in 2002

Year of

Fast

All

Fast

All

Establishment

growingsurvivinggrowingsurviving

Before 1976

3.8

17.1

Less than 5 years

3.8

3.8

1976 - 1980
1981 - 1985
1986 - 1990
1991 - 1995
After 1995

7.7
11.5
26.9
42.3
7.7

12.4
5 - 10 years
12.4
11 - 15 years
24.8
16 - 20 years
24.8
21 - 25 years
8.6 More than 25 years

46.2
23.1
11.5
7.7
7.7

26.7
23.8
15.2
10.5
20.0

Age in 2002

Looking at the age distributions of establishment by the ownership form, household
enterprises constitute a significant percentage of every age category; half of partnershipenterprises were set up in the period before 1976 and another half in the period from1981 to 1990. It is very clearly that the vast majority of private enterprises were
established during the era of renovation after 1986.

3.3 Entrepreneur characteristics

Table 6 shows the main characteristics of owner-managers in small enterprises in termsof gender, age, educational background and prior experiences. The data were collectedfrom the third round survey in 2002 in Thua Thien Hue province. In term of gender, themale were more common than the female entrepreneurs in both fast growing and all17

surviving enterprises. It is clear that male entrepreneurs in fast growing enterprises werehigher percentage than that in surviving enterprises. The age distribution of theentrepreneurs in fast and surviving enterprises has been altered since 1996, mainly due
to the additional six years in the last surveyed period and the transformation ofownership forms. On average, in 2002 the entrepreneurs in fast growing category wereyounger than that of surviving category, accounted for 3 years. The most populous
entrepreneurs in fast growing enterprises were in thirty to fifty years old, accounted for69.2 percent. While the largest percentage of entrepreneurs in surviving enterprises
were fall in the category of fifty to sixty years old, accounted for 32.4 percent. Thismeans that the younger the entrepreneurs the better the growing business in term ofvalue added. Going back to the first survey in 1996, the most populous age distributionof entrepreneurs were fall in the category of less than 30 years old and from thirty toforty years old. At that time they were quite young to penetrate in the market economy,
better than the older entrepreneurs.
In terms of education background, it is clear that the highest portion of entrepreneurs infast growing category had received high school certificate, accounted for 38.5 percent.
On the other hand, the largest percentage of entrepreneurs in surviving category was
graduated from secondary school, accounted for 28.6 percent. About 54 percent of theentrepreneurs in surviving category had up to 9 years of education (primary and18secondary school), very few entrepreneurs had vocational training and under graduate
and post graduate level.
The outcomes from this study clearly indicate that the fast growing category ofentrepreneurs had higher educational background than those in all surviving category. In
other words, the educational background of the entrepreneurs to some extend
determines the success and development of the small enterprises.
Prior experience of the owner-mangers generally contributes to formulate the behaviorsof them in doing business. The prior experience was classified as government officer,
join-venture’s worker; worker in state owned enterprises, farmers and othernon-specified categories (Table 6). Almost half of the entrepreneurs in both categories
fast growing and surviving enterprises who had former experiences in agriculturalactivities, accounted for 50 percent and 52.4 percent respectively. Very small portionsof entrepreneurs had past experience as a worker in state and joint venture companies inboth fast growing and surviving categories. On the other hand, the second common
source of entrepreneurs was from the other economic activities, accounted for 42.3 and34.3 percent in fast growing and surviving enterprises.
Relating to the working hours of the entrepreneurs before they became theowner-manager, there was no specific difference between fast growing and surviving
enterprises.

19On average they have worked for almost seven years in their business and otherenterprises prior to their careers of managers. They have relatively enough time toacquire sufficient knowledge and experience to set up and manage their own business,
especially for small enterprises.
The other interesting outcome from this study is that the majority of entrepreneurs inboth fast growing and surviving enterprises started up their business career due to thepush factor such as improving their living standard, accounted for 79.2 and 76.7 percent
respectively.
On the whole, it appears that the typical entrepreneurs representing the fast growing
enterprises were male, between 31 to 50 years old, graduated from secondary and highschool, and previous employed as farmers and other economic activities. On the other
hand, the typical entrepreneurs representing the surviving enterprises were male,between 41 to 60 years old with primary and secondary education, and past experience
as a farmer and worker in other economic activities.

20

Table 6
Main characteristics of owners/managers in 2002

Characteristics

Fast growing (%) Surviving (%)

Male

80.8

66.7

Female

19.2

33.3

44
7.7
34.6
34.6
19.2
3.8

47
6.7
23.8
29.5
32.4
7.6

Education
Primary school
Secondary school
High school
Intermediate vocational training
Under graduate
Postgraduate
Others

23.1
30.8
38.5
0.0
0.0
0.0
7.7

25.7
28.6
19.0
1.0
2.9
1.0
21.9

Prior experience
Government officer
Joint-venture's worker
State-enterprise's worker
FarmerOthers

0.0
3.8
3.8
50.0
42.3

9.5
1.9
1.9
52.4
34.3

Years of working experience
Working in this enterprises
Working in other enterprises
Working in other econ. activities

7.0
9.4
7.4

7.7
6.8
6.8

Age
Mean (years)
Less than 30 years
30 - 40 years
41 - 50 years
51 - 60 years
61 years & above

3.4 Scale of operations
This section of the study aims at the analysis on the scale of operation in terms of total
assets, capital accumulations, and employment of surviving and fast growing enterprises.

21

On average, the value of total assets of surveyed enterprises in 1995 were slightly morethan 25.6 million dong for all surviving enterprises, and a little bit higher in fast
growing category accounting for 33.3 million dong. Looking at the distributions ofassets in different group, the largest percentages of enterprises had the value of total
assets between one to twenty five million dong for both all surviving and fast growing
categories of enterprises, accounting for 68.9 percent and 76.9 percent respectively(Table 7). Comparing to surviving enterprises, the fast growing category had a smaller
portion of enterprises in category less than one million total assets and larger portions in
the third category, but smaller percentage of enterprises in the last category (more than
100 million dong). Since total value of assets composes of fixed and non-fixed assets,
so that the effects to the growth rate of small enterprises mainly depends on the qualityof their utilization. There was a vague stratification in total assets from fast growing
category to surviving category of surveyed enterprises. It is necessary to examine therelation between capital accumulation in terms of value of machinery and equipment
and growth of enterprises.
The capital accumulation process of small enterprises has been usually considered as
one of the most important

endogenous sources for their growth path. The value ofmachinery and equipment for all surviving enterprises was slightly more than 20 million
dong while fast growing enterprises had a larger value at around 26 million dong on

22

average in 2001 (Table 7). On average, in 1995 the value of machinery and equipments
was much smaller than that in 2001, accounting for around 14 million and 11 million
respectively for fast growing and all surviving enterprises. In six years, theaccumulation of capital in terms of value in machinery and equipments increased almost
two folds for both surviving and fast growing enterprises.
In 1995, the distribution of machinery and equipments clearly indicated that mostenterprises surveyed in Thua Thien Hue province were in the category less than one
million dong for both fast growing and surviving enterprises, accounting for 56 percent
and 53.4 percent respectively. The second popular group fell in the second category
from one million to ten million dong for both fast growing and surviving enterprises. On
the other hand, the distribution of investment on machinery and equipments for 2001
was increased and moved to the later categories. The most populous enterprises fell in
category two from a million to ten million dong for both fast growing and surviving
enterprises at 46.7 percent and 45.6 percent respectively. The last category more thanfifty million dong changed from 4 percent in 1995 to 13.3 percent in 2001 for fast
growing enterprises and from 3.9 percent to 7 percent for surviving enterprises. The
percentage of enterprises moving to the last category in terms of the value of investment
in machinery and equipments in 2001 was higher when compared to the whole sample
of surviving enterprises, indicating that the capital accumulation has occurred at a faster23

pace among fast growing enterprises.
Table 7
Distributions of total assets and capital accumulations
Fast growing % Surviving %Total asset in 1995 (1000 VND)
1000 and less1001 - 25000>25000 - 50000>50000 - 75000>75000 - 100000
More than 100000

7.7
76.9
11.5
0.0
0.0
3.8

11.7
68.9
6.8
4.9
1.9
5.8

Machinery and equipments in 19952(1000 VND)
1000 and less>1000 - 10000>10000 - 20000>20000 - 50000
More than 50000

56.0
36.0
4.0
0.0
4.0

53.4
32.0
5.8
4.9
3.9

Machinery and equipments in 2001 (1000 VND)
1000 and less>1000 - 10000>10000 - 20000>20000 - 50000
More than 50000

20.0
46.7
6.7
13.3
13.3

24.6
45.6
14.0
8.8
7.0

Concerning to the investment and capital accumulation in small enterprises, source offinance usually plays an important role for their expansion purpose in development.
More than half of the fast growing and surviving enterprises exclusively financed theirinvestment in machinery and equipments with their own saving/resources (Table 8).
The most popular resource for financing received from the government bank recorded at
2

The money value of machinery and equipment in 1995 has been inflated to the price of 2001.

24

58.3 percent and 53.8 percent respectively for fast growing and surviving enterprises.
The second large source of financing was the borrowing from Friends and Family, andit accounted for 41.7 percent of fast growing enterprises. Following sources were from
Farmer Association, Women Association, Local Authority and Private moneylenders.
There were no specific difference between fast growing and surviving enterprises interms of resources for financing. However, the data might underestimate the role ofinformal resources of finance such as private moneylenders, and others referred to theso-called “curb market”, which were popular resources in the province surveyed inparticular.
The development trend of small enterprises normally relates closely to the expansion oflabor force on one hand and also accompanied with the increase of investment on
machinery and other assets on the other hand.
Table 8Sources of finance on machinery and equipments in 2001
Fast growing %Surviving %Own resources

53.8

62.9

Borrowing/have loan
Banks
Women Association
Local Authority
Farmer Association
Friends and family
Private moneylenders

46.2
58.3
16.7
8.3
25.0
41.7
8.3

37.1
53.8
35.9
5.2
23.1
30.8
5.1

25

The size of enterprises in terms of total workforce slightly increased for both fast
growing and surviving enterprises during the period of 1995 – 2001. Table 9 alsopresents the percentage of the fast growing as well as a cohort of surviving enterprises interms of total workforce in 1995 and 2001. Generally speaking, the expansion of small
enterprises is usually accompanied with an increase of waged or hired labor rather thanan increase of non-paid family labor. In case of this study, the situation has been similar.
The average number of hired workers increased from 1.12 persons to 2.65 persons in the
period from 1995 to 2001 for fast growing enterprises. And increased from 1.31 persons
to 1.69 persons for all surviving enterprises in the same period. However, average total
workforce per enterprises surveyed has not changed during the two surveys, almost 3.5
persons for all cohort of surviving category. For fast growing enterprises the number ofworkforce has been increased from 3.1 persons to 4.5 persons in the period of six years
from 1995 to 2001.
The majority of enterprises surveyed in both fast growing and surviving were classified
in very tiny enterprise (from 2 to 5 persons), and accounted for 61.5 percent and 67.6
percent respectively in 1995, and correspondently for 76.9 percent and 61.9 percent in2001. The distributions of the enterprises by workforce for surviving enterprises were
almost unchangeable from 1995 to 2001. On the other hand, the distribution ofenterprises by scale in terms of employment slightly changed in fast growing enterprises.

26

The trend of fast growing enterprises moved to the later categories. In 1995, at 23.1
percent of fast growing enterprises fell in the category of one person, declined to 3.8
percent in 2001. Next category from two to five has been increased from 61.5 percent in1995 to 76.9 percent in 2001. In 1995 the category more than 10 persons was zero
percent and moved to 7.7 percent in 2001 in fast growing enterprises. It is necessary tomention that the small enterprises increased their scale in terms of employment for fast
growing category, but this was unchanged at all cohort of surviving enterprises. Further,
the percentage of wage employment is an important indicator of the contribution ofsmall business to employment generation.
Table 9Distribution of workforce in 1995 – 2001

Fast growing % Surviving %Workforces in 1995
1
2-5
6 - 10>10
Mean (person)

23.1
61.5
15.4
0.0
3.1

17.1
67.6
10.5
4.8
3.6

3.8
76.9
11.5
7.7
4.5

22.9
61.9
11.4
3.8
3.5

Workforce in 2001
1
2-5
6 - 10>10
Mean (person)27

3.5 Marketing aspects of fast growing and surviving enterprises
3.5.1 Forward linkages
In term of forward linkage, it refers to the destination of main product sales by category
and location of customers. The customers in the first survey in 1996 were classified intosuch categories as end-users, retailer, middlemen, wholesaler, manufacturing companies,
and state owned enterprises. However, the classification of the customers in the thirdsurvey was a little bit changed like domestic direct sales, direct export, domestic agency,
export agency and others. The respondents have been asked to which channels the main
products were sold. Table 10 shows the changes of marketing channels in both fast
growing and surviving enterprises in the period of 1995 to 2001. In general, thedistribution of the marketing channels in small business enterprises has not much
improved. In fact, more than two third of their products were directly sold to customers
in both fast growing and surviving enterprises in the period of 1995 to 2001. For
example, in 1995 at 76 percent and 69.4 percent of total sales in fast growing andsurviving enterprises respectively were sold to the end users (customers). Similarly, in2001 at 72.9 percent and 68.5 percent of total sales for fast growing and surviving
enterprises were sold in domestic direct channel. The main channels for both fast
growing and surviving enterprises in 1995 were end users, private retail company,
private middlemen and wholesaler. However, the most important channel was the end

28

user. In 2001, the main channels of sales for both fast growing and surviving enterprises
were domestic direct, domestic agency and exports.
Table 10
Forward linkages of fast growing and surviving enterprises in 1995 and 2001
Fast growing % Surviving %Destinations of sales in 1995
End user
RetailMiddlemen
Wholesaler
Manufacturing company
State owned company
Others

76.0
9.2
9.8
3.5
0.0
0.4
1.2

69.4
12.2
8.5
7.8
0.6
0.4
1.1

72.9
3.1
22.3
4.6
4.8

68.5
1.3
19.6
3.5
11.9

Destinations of sales in 2001
Domestic direct sales
Direct export
Domestic agency
Export agency
Others

The imperfectly developed markets, small enterprises are mostly in a good position tocater to the individualized and localized demand of individual consumers through theirflexibility and proximity to the market. It might be in a good position for small businessenterprises in a short run. However, they will lose their position in a competitive market
in a long run. The linkages to the international market were very limited for small
enterprises, compared to that of large enterprises. The main reasons for that are found in
the capacities of the small enterprises in terms of production management, marketing29

development, and personnel management.
3.5.2 Backward linkages

The backward linkages in this section address the position of small enterprises in terms
of procurement inputs of different suppliers. Table 11 shows the procurement of raw
material of the enterprises surveyed by sectors from various sources in 2001. In
surviving enterprises, almost one third of raw materials (34%) purchased from theproducers, slightly more than half (55%) from the merchants, 5.3 percent from thegovernment companies, and 5.6 percent from the other unspecific sources. On the other
hand, the fast growing category incurred a similar percentage of those sources that havebeen procured by the surviving enterprises. The majority of the surviving as well as fast
growing enterprises established personal relations with the suppliers on themarket-based mechanisms to procure raw material. Half of the fast growing enterprises
did not purchased any raw materials from the producers. On the other side, 27.3 percentof them purchased exclusively all of raw materials from the producers. The remained
part of fast growing enterprises procured somewhat percentages from 1 to 74 percent of
raw materials. Compared to fast growing enterprises, the surviving enterprises had asimilar distribution of getting raw materials from the producers. For instance, 52 percent
of surviving enterprises did not purchase absolutely any percentage of raw materials

30

from the producers.

Related to the distribution of raw material supply from the merchants, about 45.5
percent of the fast growing and 36.7 percent of surviving enterprises did not purchaseany percentages of raw materials from the merchants. At the other spectrum, about 36.4
percent in the fast growing and 42.9 percent in the surviving enterprises exclusively
purchased raw materials from the merchants. The remained portion of the fast growing
enterprises of 18.2 percent purchased about fifty to ninety nine percent of raw materials
from the merchants. The other sources to supply raw materials like the government andother unspecific suppliers were very limited to both fast growing and surviving
enterprises.

Table 11
Procurement of raw materials in 2001 (%)
0

1-24 25-49 50-74 75-99

a. Raw materials from producers
Fast growing 50.0 9.1
4.5
Surviving
52.0 7.1
7.1
b. Raw materials from merchants
Fast growing 45.5
Surviving
36.7 1.0
4.1
c. Raw materials from government
Fast growing 90.9
Surviving
93.9
1.0
d. Raw materials from others
Fast growing 90.9
Surviving
90.8 1.0
3.1

100

Average

9.1
7.1- 27.3
1.0 25.5

33.9
34.0

9.1
10.2

9.1 36.4
5.1 42.9

50.2
55.1

-

1.0

9.1
4.1

9.1
5.3

4.5
1.0

1.0

4.5
3.1

6.8
5.6

31

V.

Which enterprises survived?

In this section, we turn our attention to the determinants of survival enterprises byadopting the multivariate analysis. To answer the question: Given that those enterprises
operated in 1996, what are the factors that help some enterprises to survive until 2002?

The logistic model, where the binary dependent variable is set equal to 1 if theenterprise survived from 1996 to 2002 was adopted. Several researchers, such as
McPherson (1995), Storey and Wynarczyk (1996), Littunen (200), Vijiverberg andHaughton (2001), have conducted the empirical studies on firm survival. There is a setof model, which utilizes the characteristics of the enterprises surveyed in 1996 and still
survived. Table 12 shows the estimated results of the multivariate analysis.

The micro and small enterprises were less likely to survive in the urban, which islocated in Hue City, than the rural areas. At first sight this is surprising, because Hue
City is the place of better economic as well as social conditions and most economicallydynamic part of the province. Presumably the area is so dynamic that it is pulling people
to wage employment or shifting to the other economic activities, leaving less of them to
run the small and household enterprises. On the other hand, small enterprises were more
likely to survive in the rural areas where there are less pressures of competition,
abundant with local raw materials and cheap labors.

32

Related to the entrepreneur’s characteristics, it is expected that male owners/managers
were more likely correlated to survival enterprises than female. Enterprises run byyoung entrepreneurs (less than 26 years old) were also more likely to survive than thoseof upper middle and older age. However, it is surprising that the educational level of theowners/managers did not influence the survival rate of the enterprises. While, theirworking experiences had positively related to the survival rate of the enterprises.

33

Table12Enterprises Survival: A Logistic Model
Coefficientt-statIntercept-5.3436.010

Region:Urban-1.086

6.053

0.879
1.161
0.530
-0.100-1.844-0.042
0.080

2.872
2.141
1.000
0.046
5.229
0.733
9.389

-0.377-0.2661.633-1.037-0.977
0.109

0.216
0.138
3.257
2.112
1.763
0.016

-0.047
0.360
0.159

1.819
4.472
0.427

Entrepreneur’s characteristics*:
Male
Age less than 26
Age between 26 and 35
Age between 36 and 45
Age between 46 and 55
Year of schoolingYear of experiences
Sectors**:
Construction
Food processing
Hat making
Carpentry
Machinery services
Clothing
Scale operation:
Labor
Log (Capital +1)
Log (Revenue+1)

Note: * Group of age over 55 years was excluded category** Metal sector was excluded category
The sized effect of the enterprises has been considered as an important factor to survival
rate by many studies such as Goreski (1995), Agarward and Audretshch (2001), andVijverberg (2001). Larger enterprises were measured by the size of total capital, weremore likely to be in operation until 2002. However, the enterprises measured by the size34

of total workforce, were less likely to survive in 2002. It might be a lesson here thatenterprises have to grow to survive.

VI.

Which enterprises grow?

Now we turn to address the next question, among the survival cohort of enterprises until
2002, which enterprises are growing? In other words, which factors determine thegrowth rate of the small business in the province of Thua Thien Hue? In the previous
sections, the growth of the enterprises has been studied by bivariate correlation between
their growth and major characteristics of the entrepreneurs. In order to distinguish theeffect of each of factors simultaneously we adopt multivariate analysis.
The growth of small enterprise is defined as the percentage change in its value added. It
is considered to be an important indicator for measuring growth rate of small enterprises.
Other researchers, on the other hand, argued that the changes of sales were a significant
indicator for growth rate of small enterprises. This is in conformity with the studies by
Cuba, Decenzo and Anish (1983), Khan and Rocha (1982), Ibrahim and Goodwin(1986).3
As mentioned in the previous sections, the value added reveals to be the mostappropriate indicator for the growth of the small enterprises4. The value added (net3

Michael A. McPerson, 1994 have used labor as a key indicator for growth of small enterprises.

4

It could be better to use net profit for measuring growth of enterprises, but for small business enterprises

35

revenue) defined as total revenue minus all cost except labor costs of owners and family
member that were working without payments. We estimate an extended Cobb Douglass
type production function to which we add several variables, which were found to becorrelation to the growth rate of the enterprises ( Vijverberg and Haughton 2001). This
study will attempt to analyze the surviving enterprises that dated back from the firstround survey in 1996 to the latest survey in 2002. It is hypothesized that the growth ofan enterprise is significantly influenced by the following set of variables: enterprise size(+); age of enterprise (+/-); education level (+) and age of entrepreneurs (+/_); gender ofowners/managers (+); size of household (+), specific type of industry (+/_); and locationof the enterprises (+). The size of enterprises expected to be positive to their growth.
The education level of entrepreneurs may expect to have a positive to the growth ofenterprises. The different age groups are included in the model because it may be thatthe older entrepreneurs with long experience in their enterprises could make enterprises
growth faster than younger ones. However, in the new market economy in Vietnam, theyoung owners/managers may actively run their business better than the older pioneers.
Therefore, it expected to have positive or negative effect. Conversely, as revealed by astudy on small-manufacturing firms in India it can also be noted that younger firms

it was impossible to calculate correctly the labor costs of family members and owners who also work intheir business.

36

growth faster as a result of more dynamic management. Hence, the expected coefficientof this variable can be either positive or negative. The male entrepreneurs expected topositive relation with the enterprises growth. The size of household expected to bepositive correlation to growth, so that variable HSIZE would be positive sign. In
addition to the above, growth of specific enterprise may be attribute partially to thespecific nature of the industry in which they operate. The region variable could be
expected to positive correlation to growth, because we divided it into two groups, one isurban the other is rural, and the urban area had a dummy value of 1. In order to capture
any such industry specific nature of growth, seven intercept dummy variables are used
for the seven sectors to which the sample enterprises belong.
Table 13 shows the results of estimating of an ordinary least square regression on
surviving enterprises from 1995 to 2002. However, this does not represent theexperience of all enterprises, since about half of them that existed in 1996 were nolonger in existence in 2002.
The regression model has R2 – values at around 0.328. This means that about one thirdof the variation in the enterprise growth in explained by the model. Because thedependent variable in terms of the changes in the value added in 1995 and 2001, refer totheir difference between two moments in time, the noise that occurred in the value
added of the enterprise models is essentially multiplied. Moreover, the total sample in37

the first survey was 895 enterprises, reduces to 241 in the third survey, and further
declines to 93 samples in the current model. This reduces the precision of the parameter
estimates. All this suggests that the more precise estimate of the determinant of theenterprise growth the bigger datasets of the surveyed samples are demanded.
Despite of the low level of statistical significant of the most estimates, there are several
interesting conclusions. First, the size of the enterprise in terms of capital and labor has
different effects on the enterprise growth. Total capital has a positive effect on theenterprise growth, but a very limited. On the other hand total labor has a negative effecton the growth rate of the enterprises.5 Second, the youngest enterprises (less than 7
years) seem to growth the fastest, as mentioned in the previous section. Third, thehighest growth rates are in metal, clothing, and food process and construction sectors.
Fourth, the educational backgrounds of the owners/managers and middle age of theowners/managers have positive influence on the enterprise growth rate. Further, themale entrepreneurs and the household size also contribute to the growth of the small
enterprises. Fifth, the enterprises located in the urban areas seem to growth faster thanthose in rural areas.

5

The mean growth rates of surviving enterprises are not independent of their sizes but
tend to decline with size and also with the unit’s age (Caves, 1998). The mean growthrate tends to decline significantly with size in 89 percent of the individual industries thatwas found in the study of Evans (1987a).

38

Table 13
Determinants of growth rate in the small enterprise value added

Parameter estimate

t-statDependent variable: “Log (Value added 2001+1) – Log (Value added 1995 +1)
Intercept-0.769-1.197

Enterprise size
Log (Capital)
Log (Labor)

0.023-0.2560.385-0.811Enterprise age less than 7 years
Enterprise age between 16 and 25 years
Enterprise age more than 25 years

0.155-0.112-0.1910.601-0.608-0.840Construction
Food processing
Carpentry
Machinery services
Clothing
Metal

0.585
0.454
0.320
0.217
0.719
0.716

1.796
1.638
0.952
0.647
2.062
2.019

Log (Education years +1)
Age less than 26
Age between 26 and 35
Age between 36 and 45
Age over 55
Gender owner
Log (Household size)
Region0.166-0.6600.191-0.041
0.058
0.151
0.024
0.293

0.634
-1.3530.827-0.224
0.171
0.716
0.540
1.465

R-squared

0.328

F-statNumber of observations

1.900
93

Enterprise characteristics

Entrepreneurs characteristics

39

VII.

Concluding remarks

This paper focuses the analysis on the dynamism of micro and small enterprises in theprovince of Thua Thien Hue. It finds that the small enterprises were largely changed
between the two surveys in the period of 1996 and 2002. On average around 43.5 percent of enterprises has been closed down. However, the patterns of dynamism clearly
differed between different sectors and enterprises. It was interesting to emphasize thetwo general trends of dynamism of unsuccessful enterprises, one is to the services sector
and another is to agricultural sector. In addition, their dynamism has also presented in
the transformations of the ownership forms, economic sectors, major characteristics ofthe owners/managers, scale of operation and their linkages to the markets as well asinter-firm linkages.

The study finds that the small enterprises are less likely to survive in the urban areas
than in the rural ones. The educational background of the owners/managers has aninverse relation to the survival, but their past experience has a positive impact to thesurvival. The younger owners/managers are more likely to manage their enterprises tosurvive than the older ones. The scale of enterprises measured by total capital has apositive relation to the enterprises survival.

40

However, most of the estimates for growing enterprises are not statistically significant.
Therefore, we could not conclude which determinants are important for growing
enterprises in Thua Thien Hue province. It also suggests having a larger survey andin-depth studying to have the precise conclusions.

41

References
Agarwal, R., and D.B. Audretsch, 2001, ‘Does Entry Size Matter?’,

Journal ofIndustrial Economics 49 (1), 21-43
Aw, B.Y., 2002, ‘Productivity Dynamics of Small and Medium enterprises in Taiwan’, ,Small Business Economics 18, 69-84
Baumol, W. J., 1962, ‘On the Theory of Expansion of the Firm’, American Economic
Review (December), 1078-1087
Boomgard et al 1992, ‘A Subsector Approach to Small Enterprise promotion andResearch’, World Development 20 (2), 199-212
Caves, R. E., 1998, ‘Industrial Organization and New Findings on the Turnover andMobility of Firms’, Journal of Economic Literature 36 (4), 1947-1982
Chenery, H. B., 1952, ‘Over Capacity and the Acceleration Principle’, Econometrica 20(1), 1-28
Cuba, R., D. Decenzo, and A. Anish: (1983), 'Management Practice of Successful
Female Business Owners', American Journal of Small Business, 2(8), 40-46
Dawson, J., 1992, ‘The Relevance of the Flexible Specialization Paradigm for
Small-Scale Industrial Restructuring in Ghana’, IDS Bulletin 23 (3), 34-39
Dunne, P. and A. Hughes, 1994, ‘Age, Size, Growth and Survival: U.K. Companies in
1980s’, The Journal of Industrial Economics XLII (2) (June), 115-139
Dunne, T., M. J. Roberts and L. Samuelson, 1989, ‘The Growth and Failure of U.S.
Manufacturing Plants’, The Quarterly Journal of Economics (November), 671-698
Evans, D. S., 1987a, ‘Tests of Alternative Theories of Firm Growth’, Journal of
Political Economy 95 (4), 657-674
Evans, D. S., 1987b, ‘The Relationship Between Firm Growth, Size, and Age: Estimatesfor 100 Manufacturing Industries’, The Journal of Industrial Economics XXXV (4),567-58142

Harris, J., 1990, ‘Linkages between the Formal and the Informal Sectors in Developing
Countries: A Review of the Literature’, WEP2-19/W. Working Paper, World
Employment Programme, ILO, Geneva, 50
Ibrahim, A.B, and J.R.Goodwin: (1986), 'Perceived Causes of Success in Small
Business', American Journal of Small Business 2(11), 41-50
Iqbal, F. and S. Urata, 2002, ‘Small Firm Dynamism in East Asia: An Introductory
Overview’, Small Business Economics 18, 1-12
Jorgenson, D.W., 1963, ‘Capital Theory and Investment Behavior’, American Economic
Review 53, 247-259
Kawai, H., S. Urata, 2002, ‘Entry of Small and Medium Enterprises and Economic
Dynamism in Japan’, Small Business Economics 18, 41-51
Khan, R., and J. Rocha, 1982, 'Recurring Managerial Problems in Small Business',
American Journal of Small Business, 1(7), 50-58
Littunen H., 2000, ‘Networks and Local Environment Characteristics in the Survival of
New Firms’, Small Business Economics 15, 59-71
Marris, R, 1964, The Economic Theory of ‘Managerial’ Capitalism, New York: The
Free Press of Glencox
McPherson, M. A., 1995, ‘Simulation of Concentration Development from Modified
Gibrat Growth-entry-exit Process’, The Journal of Industrial Economics XLIII (4),405-433
Penrose, E. T., 1995, The Theory of the Growth of the Firm, 3rd edition, Oxford: Oxford
University Press
Ramamurthy, Bhargavi, 1998, 'The Private Manufacturing Sector in Vietnam
1991-1997: An analysis of the deceased', Working Paper Series in Economics andFinance 252, Stockholm: Stockholm School of Economics

43

Rasmusen, J. et al, 1992, ‘Introduction: Exploring a New Approach to Small-Scale
Industry’, IDS Bulletin 23 (3), 2-7
Rodriguez, A.C., et al, 2003, ‘Size, Age and Activity Sector on Growth of the Small andMedium Firm Size’, Small Business Economics 21, 289-307
Ronnas, Per: (1992), Employment Generation though Private Entrepreneurship in
Vietnam, Geneva: SIDA, ILO-ARTEP
Schmitz, H., 1992,’On the Clustering of Small Firms’, IDS Bulletin 23 (3), 64-69
Storey, D. and P. Wynarczyk, 1996, ‘The survival and non Survival of Micro Firms in
the U.K.’, Review of Industrial Organizations 11, 211-229
Takeuchi, J., et al, 1999, ’Historical Features of Japanese Small and Medium
Enterprises: A Comparative Economic Approach’, in Konosuke Odaka and Minoru
Sawai (ed.), Small Firms, Large Concerns: The Development of Small Business in
Comparative Perspective, Oxford University Press
Vijverberg, W. P. M. and J. Haughton, 2001, ‘Household enterprises in Vietnam:
Survival, Growth, and Living Standards’, see www.worldbank.org.vn
Wang, Y., Y. Yao, 2002, ‘Market Reforms, Technological Capabilities and the
Performance of Small Enterprises in China’, Small Business Economics 18, 197-211
Wiboonchutikula, P., 2002, ‘Small and Medium Enterprises in Thailand: Recent
Trends’, Small Business Economics 18, 213-226

44