The impacts of provincial institutional quality on the productivity of Vietnamese enterprises

Abstract

This study uses enterprises survey data collected by the General Statistics Office (GSO), combined with provincial competitiveness data to assess the impact of local institutional quality on the productivity of Vietnamese enterprises in the period 2010-2014. The results of empirical research show that: (i) Institutional enforcement in localities has a strong impact on the productivity of interprises; (ii) Institutional improvements, related to market access costs, access to land, transparent publicity, informal costs, dynamics of provincial leaders, business support policies, have positive impact on the productivity of the enterprises; (iii) The impact of indicators representing institutional quality on enterprise productivity varies with the size of the enterprise and varies bentween FDI and domestic firms. On this basis, the study proposes some recommendations to improve the quality of local institutions in the interest of increasing the productivity of enterprises, thereby promoting economic growth.