Factors affecting sustainable development of SMEs in Vietnam

Abstract

This study was conducted to understand the factors affecting the sustainable development of Small and Medium Enterprises (SMEs) in Vietnam. Based on the SMEs survey data set in 2011, 2013, and 2015 implemented by UNU-WIDER in collaboration with a research group from the University of Copenhagen, the Central Institute for Economic Management (CIEM), and the Ministry of Labour, Invalids and Social Affairs, through panel data regression estimation methods such as Pooled Ordinary Least Square (OLS) regression, Fixed Effect (FEM), Random Effect (REM). After conducting testing and comparing the effectiveness of these methods, the Pooled OLS method is considered to be the most effective. Based on the Pooled OLS method, the research results provide evidence showing the role of physical capital, labor, number of years of operation of enterprises, exports, innovation, and type of ownership in the sustainable development model of SMEs. The findings highlight the novel contribution of innovation in SMEs sustainable development in Vietnam.