Essays in innovation, trade and determinants of growth
Creators: name: Hoang, Hang
Publisher: name: The Australian National University
Year: 2021

description: This thesis is a collection of three standalone microeconomic papers on firm innovation, corruption and growth in Vietnamese small and medium size enterprises (SMEs). This thesis first investigates the determinants of innovation in small and medium size manufacturing enterprises (SMEs) in Vietnam using the SME's surveys from 2005 to 2015. The linear probability model (LPM FE) and logit fixed effects (Logit FE) model are used to estimate the impacts of internal factors (firm characteristics) and external factors (trade characteristics) on innovation in Vietnam manufacturing SMEs. The empirical results reveal that larger sized SMEs have higher demand for investment, spend research and development (R&amp;D) and those have higher skilled managers are more likely to innovate. However, the impact of firm size on innovation varies, depending on the type of innovation and the interactions with other internal and external factors. Unlike previous studies on innovation in Vietnam, this paper captures firm characteristics and international trade impacts on firm innovation from one period to the following period. Whilst there is not much difference in the probability of innovation across industries, international trade characteristics have considerable effects in determining innovation in manufacturing factors in Vietnam. The findings are consistent with the Schumpeter (1934) theory of innovation. These results also contribute to the existing endogenous growth and innovation literature by providing new evidence for better understanding determinants of innovation in manufacturing sectors in Vietnam. The thesis then investigates how firms transform innovation into growth. Using the same Vietnam SMEs data sets, two step quantile regressions (2SQR) are employed to explore explanations behind success and failure in transforming innovation into firm growth. First, the relationship between the three types of innovation and growth varies by quantiles and depends upon growth measurements (sales growth, labour productivity growth and employment growth). Secondly, over the period corruption significantly affected firm growth and its effect is more evident in young and networking firms. Thirdly, other firm characteristics such as total assets, investment, managers' education and exports significantly affect innovation and firm growth. Consequently, although young SMEs in Vietnam are more innovative, often pay more bribes than their older counterparts, lack resources and face higher risk of failure in turning innovation knowledge into successful growth. Finally, using the same data sets for the period from 2007 to 2015 and fixed effect estimations (FE), we explore the effects of gender on SME activities in three dimensions: innovation, credit access and environmental outcome. The results provide evidence that there are no gender differences in firm innovation and environmental outcomes, but that gender gap plays a role in access to credit. Decomposition analysis shows that firm characteristics rather than gender have significant effects on firm innovation, access to credit, and environmental outcomes of firms. We find that firm size, R&amp;D, network, government support program, ownership, export, owners/managers' education, and knowledge about environmental law influence the entrepreneurs' gender-firm innovation, credit access, and environmental outcome relationships. Corruption plays a particularly significant role in credit access and environmental outcome. In brief, this research attempts to provide empirical evidence about Vietnam manufacturing SMEs relating to innovation and determinant factors of growth. Focusing on corruption, gender entrepreneurs and other firm characteristics, we intend this research to contribute to better understanding of the links between research, industry and effective innovation system.