Technical efficiency of small-scaled manufacturing enterprises in six different sectors in northern Vietnam

Abstract

This paper examines the technical efficiency of small-scale manufacturing enterprises in Vietnam. The research uses primary data from a survey from June, 2019 to August, 2019 with 321 observations of six sub-sectors, including Textile, Garment; Building materials; Vegetable, Fruit and Bulb; Manufacture of Steel; Furniture Manufacturing and Food Processing. The research’s results show that the mean technical efficiency was 71.26 percent. However, there are considerable differences between sub-sectors ranging from 55.97 percent to 95.97 percent. The above mentioned results indicate that with the same level of inputs, Vietnamese small size enterprises can increase the present level of output by 44.03 percent; 38.05 percent; 30.92 percent; 26.07 percent; 21.05 percent and 4.08 percent for the sectors of Food Processing, Building Material; Textile, Garment; Vegetable, Fruit and Bulb; Manufacture of Steel and Furniture Manufacturing, respectively. The estimated results further suggest that manufacturing small-scale enterprise in Vietnam should improve their technology, labor quality and the initiative of input materials, especially, the sectors of Textile, Garment; Building Materials and Food Processing in order to move the production frontier upward as their technical efficiency are maintaining at low level.