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Factors Affecting the Support of Industrial Businesses’ Performance in Vietnam’s Digital Economy

Year: 2025
Type: article
Abstract: This study analyzes what factors affect the technical efficiency (TE) of firms in the supporting industry in the context of Vietnam’s digitalized economy. Stochastic Frontier Analysis (SFA), Fixed Effect Models, System-GMM methods are applied to reach the findings that quality of human resources, capital intensity and firm size have positive effects on TE. Furthermore, exogenous environment factors such as domestic demand of an industry impacting to all upstream businesses which use inputs that are products of that industry (BSpill-ratio) and FDI backward effect (BFSpill) also exhibit positive effects. These confirm the linkage between domestic supporting industry suppliers and FDI assembly enterprises plays an important role to improve TE. Vietnam's digital transformation since 2020 has also created some interesting changes in the correlation coefficient. Location, sectors, competitiveness, and investment environment are also considered to prove that they are all determinants to be attention in management policies of both firm-level and government-level. Our contribution of this study is new policies aligned with many major changes in the world economic context such as the tough tariff policy implemented in recent presidential administrations, a series of reforms of the Vietnamese Government as well as strong digital transformation in Vietnam. Key findings of this research are important by confirming which factors are really determinants for Vietnamese government to imply investing policies for this industry effectively.
DOI: 10.3390/su17177996
Language: English
Open Access status: gold
Estimated APC paid: $2,896
OpenAlex ID: W4414023929
FWCI:
Cites: 40
Cited by:
Related to: 10