Local Governance and Business Performance in Vietnam: The Transaction Costs Perspective

August 2017, Regional Studies, Forthcoming

35 Pages Posted: 10 Aug 2017

See all articles by Bach Nguyen

Bach Nguyen

Aston University - Aston Business School

Tomasz Mickiewicz

Aston University - Aston Business School

Jun Du

Aston University, Aston Business School, Economics and Strategy

Date Written: August 9, 2017

Abstract

This paper adopts transaction costs perspective to explain why growth of small and medium-sized enterprises (SMEs) may vary across regions of an emerging economy. Furthermore, it is argued that young and small firms gain more from improvement of local governance than old and large firms do. In addition, depending on the institutional history, SMEs will respond differently to the incentives provided by local governance. Analysing more than 300,00 SMEs in Vietnam during the 2006-2012 period, it is shown that higher quality local governance positively influences local SME revenue growth; this effect is stronger for young and small firms, and matters more where institutional history suggests less support for entrepreneurship.

Keywords: Transaction costs, governance, institutions, local government, entrepreneurship, Vietnam

JEL Classification: D02, H73, L25, L26

Suggested Citation

Nguyen, Bach and Mickiewicz, Tomasz Marek and Du, Jun, Local Governance and Business Performance in Vietnam: The Transaction Costs Perspective (August 9, 2017). August 2017, Regional Studies, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3015883

Bach Nguyen

Aston University - Aston Business School ( email )

Aston Triangle
Birmingham, B47ET
United Kingdom

Tomasz Marek Mickiewicz (Contact Author)

Aston University - Aston Business School ( email )

Aston Triangle
Birmingham, B47ET
United Kingdom

Jun Du

Aston University, Aston Business School, Economics and Strategy ( email )

Aston Triangle
Birmingham, B4 7ET
United Kingdom
004401212043340 (Phone)

HOME PAGE: http://www.abs.aston.ac.uk/newweb/staff/detail.asp/sfldStaffID=A0000717

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