Tran Quang Tuyen, Vu Van Huong

Main Article Content


This is the first study to examine the impact of government support on the performance of small and medium enterprises (SMEs) in Vietnam. Using the data sets of the 2007-2015 period, the study indicates that government support has a positive impact on SMEs’ innovation, product innovation and application of new technologies. Our research also shows that government support affects the creativity, product and process innovation for formal enterprises only. The results imply that the government has significantly invested in supporting innovations. In order for these policies to be effective, it is vital to go along with other policies which in turn can promote the transition of SMEs from informal into formal firms.


Innovation, product innovation, government support, SMEs, Vietnam


[1] Dau, T.A. and T.N. Pham, Difficulties in trading of Small and medium sized enterprises in Vietnam, Hanoi, Vietnam: Vietnam Chamber of Commerce and Industry (VCCI), 2016.
[2] Trần Quang Tuyến, Vũ Văn Hưởng, “Những rào cản đối với sự phát triển của doanh nghiệp tư nhân ở Việt Nam”, Tạp chí Quản lý Kinh tế, 82 (2017) 5, 27-36.
[3] Rand, J., “Credit constraints and determinants of the cost of capital in Vietnamese manufacturing”, Small Business Economics, 29 (2007) 1-2, 1-13.
[4] Brandt, K., et al., Characteristics of the Vietnamese business environment: Evidence from a SME survey in 2015, Copenhagen, Denmark: UNU-WIDER, 2016.
[5] Branstetter, L. and M. Sakakibara, “Japanese research consortia: A microeconometric analysis of industrial policy”, The Journal of Industrial Economics, 46 (1998) 2, 207-233.
[6] Lerner, J., “The government as venture capitalist: The long-run impact of the SBIR program”, The Journal of Private Equity, 3 (2000) 2, 55-78.
[7] Aerts, K. and T. Schmidt, “Two for the price of one? Additionality effects of R&D subsidies: A comparison between Flanders and Germany”, Research Policy, 37 (2008) 5, 806-822.
[8] Clausen, T.H., “Do subsidies have positive impacts on R&D and innovation activities at the firm level?”, Structural Change and Economic Dynamics, 20 (2009) 4, 239-253.
[9] David, P.A., B.H. Hall, and A.A. Toole, “Is public R&D a complement or substitute for private R&D? A review of the econometric evidence”, Research Policy, 29 (2000) 4-5, 497-529.
[10] Cefis, E. and O. Marsili, “Going, going, gone. Exit forms and the innovative capabilities of firms”, Research Policy, 41 (2012) 5, 795-807.
[11] Ettlie, J.E. and A.H. Rubenstein, “Firm size and product innovation”, Journal of Product Innovation Management, 4 (1987) 2, 89-108.
[12] Almus, M. and D. Czarnitzki, “The effects of public R&D subsidies on firms' innovation activities: The case of Eastern Germany”, Journal of Business & Economic Statistics, 21 (2003) 2, 226-236.
[13] Czarnitzki, D. and G. Licht, “Additionality of public R&D grants in a transition economy: The case of Eastern Germany”, Economics of Transition, 14 (2006) 1, 101-131.
[14] Zúñiga Vicente, J.Á., et al., “Assessing the effect of public subsidies on firm R&D investment: A survey”, Journal of Economic Surveys, 28 (2014) 1, 36-67.
[15] Loayza, N., “The economics of the informal sector: A simple model and some empirical evidence from Latin America”, Washington, D.C: The World Bank, 1999.