The Effect of Firm’s Growth on Firm Survival in Vietnam

Abstract

With the dataset of 7,962 firms in Vietnam and using the Cox proportional hazard model, the main findings are drawn that the relationship between the firm's growth (both in employment and in assets) and its survival is positive and non-linearity, and as increasing the growth, the effect of firm's growth on the firm survival is diminishing. In addition, we also find that the presence of private domestic and foreign firms can improve survival chances compared to state firms; the firm size in assets and initial debt have positive relationships with firm survival; earnings before taxes over labour in year t - 1 and the return on assets in year t - 1 are important and have positive impacts on firm survival in year t, whereas the leverage in year t - 1 has a negative impact on the probability of survival in year t for firms in Vietnam.