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Essays in applied microeconomics and development: an examination of micro, small and medium enterprises in Vietnam
This thesis contains three essays that analyse and provide insight into the topics of social capital and political connections, access to finance and domestic exporting spillovers. For each topic, this thesis considers their effect on indicators of firm performance including profitability, misallocation of capital and productivity. The common theme throughout this thesis is that these topics are examined in the context of the operation of micro, small and medium enterprises located in Vietnam. We consider how firms? interactions in these areas impacts on their performance. Vietnam represents a unique and instructive country to examine in order to learn about firm behaviour, to seek out potential avenues that would further improve its ability to grow, and to do so in ways that may also be relevant for other developing countries. Unprecedented economic growth and development in Vietnam saw it making the transition from a closed economy to one that is integrated and globally linked. However, despite the progress that Vietnam has undergone, much remains to be done to create sustainable economic growth. Micro and SMEs represent a vital component of this growth strategy. The availability of detailed data, often surveying the same firms and households over time, also allows for a richer empirical analysis to be undertaken. Chapter one of this thesis provides a more detailed introduction. Chapter two considers the impact of social capital and political connections on both households? operation of an enterprise and enterprise profitability. A detailed household panel dataset is constructed to conduct this analysis for the time period 2008 ? 2012. We examine three indicators of social capital, membership of the key social groups in the community; the women?s union and farmers? union and a measure of generalised trust. Our measure of political connections is whether a household has a relative in a position of political power. We find that membership of the women?s union assists households in operating an enterprise and is particularly important for poorer households, while membership of the farmers? union is important for enterprise profitability. Social capital in the form of generalised trust has a positive impact on both operating an enterprise and enterprise profitability. A positive effect of political connections is found for a households? operation of an enterprise, however a negative effect on enterprise profitability is observed. Chapter three explores the relationship between access to ex-ternal finance and misallocation of capital. Using the frame-work devised by Hsieh and Klenow (2009) to quantify the ef-fects of distortions in the allocation of capital inputs, we measure misallocation by examining the dispersion in the mar-ginal revenue product of capital. We consider the relation-ship between access to formal finance, informal finance or a combination of both formal and informal finance with misallo-cation. This analysis is undertaken using a panel dataset of micro and small manufacturing firms operating in the 2005 ? 2013 period in Vietnam. We find a positive and statistically significant relationship between access to all types of ex-ternal finance and relative MRPK, while access to external finance is associated with lower levels of capital misalloca-tion across firms. Splitting our analysis by firm size, we find that informal finance plays a more important role in re-ducing inefficiencies in the allocation of capital for micro firms than for small firms. Chapter four investigates the potential for spillovers from domestic exporters to improve the productivity of domestic non-exporting firms, as an alternative to spillovers from foreign sources. The effect of domestic spillovers is linked to firm productivity with the use of a detailed panel dataset combining information from the Vietnam Enterprise Survey with a specially designed survey examining the technological ability and competitiveness of the firms from 2009 to 2012. Revenue based measures of horizontal and vertical spillovers are constructed in a way that is comparable to measures of spillovers used in the literature on foreign direct investment. Estimates of total factor productivity are also constructed. A positive effect of vertical spillovers via forward linkages is found in the analysis. An analysis of the role of firms? absorptive capacity for their ability to benefit from spillovers yields limited evidence that absorptive capacity is a precondition for spillover gains. Chapter five concludes
Keyword(s): Microeconomics; Micro, Small and Medium Enterprises; Vietnam; Social Capital; Political Connections; Firm Performance; Spillovers; Access to Finance
Publication Date:
Type: Doctoral thesis
Peer-Reviewed: Yes
Institution: Trinity College Dublin
Citation(s): KINGHAN, CHRISTINA, Essays in applied microeconomics and development: an examination of micro, small and medium enterprises in Vietnam, Trinity College Dublin.School of Social Sciences & Philosophy.ECONOMICS, 2018
Publisher(s): Trinity College Dublin. School of Social Sciences & Philosophy. Discipline of Economics
Supervisor(s): Newman, Carol
First Indexed: 2018-09-19 06:49:46 Last Updated: 2018-09-21 06:40:40