Manager’s ability, wage minimum policy, and firm size on firm performance: An empirical analysis in the real estate and construction sector

Nguyen Ho Phi Ha,Nguyen Quang Minh

doi:10.5267/j.ac.2021.1.008

Abstract

The real estate and construction industry have significantly played a particularly important role in economic development in each economy. In the case of Vietnam, the real estate and construction industry have greatly contributed a large proportion to the gross domestic product (GDP) growth with a sustainable annual growth. The purpose of this study is to examine the impact of manager’s ability, wage minimum policy, and firm size on firm performance. Using 220 real estate and construction firms in the case of Vietnam, results depict that a greater ability of managers in the real estate and construction sector will significantly enhance the efficiency of businesses. In addition, a larger firm can reach a higher firm efficiency while the efficiency of the real estate and construction firms is not impacted by changes of wage minimum policy.

Highlights

All countries aim to find and increase the financial resources they can obtain in order to achieve economic growth and social improvement
Regarding manager’s ability, the regression coefficient is 0.134, significant and positive. It means that a greater ability of managers in the real estate and construction sector will increase the profitability of businesses
It can be said that the real estate and construction industry always plays a important role in each economy

Summary

Introduction

All countries aim to find and increase the financial resources they can obtain in order to achieve economic growth and social improvement. Small and medium-sized enterprises (SMEs) contribute more than a half of GDP, and support for SMEs is one of the most priorities for economic growth, job creation (Nguyen and Pham, 2017; Nguyen et al, 2020). SMEs have significantly played a very important role in robustness of economic growth, and accounted for over 95 percent of all firms in the country. Up to 2019, Vietnam has approximately 700 thousand firms with nearly 600 thousand private enterprises which contribute 40 percent of GDP and roughly 50 of job creation. To keep sustainable development in the long term, Vietnam is currently encouraging more foreign investments as well as conducting startup programs in order to enhance growth and strongly focus on providing incentives to SMEs (Nguyen and Pham, 2017; Le et al, 2020; Sadiq et al, 2020). Hanoi is a major and capital city of the country, and the total number of enterprises in Hanoi city are approximately 286,631 enterprises, in terms of the number of enterprises, districts of Ha Dong, Cau Giay, Dong Da, Hoang Mai, Nam Tu Liem, and Thanh Xuan have the number of registered enterprises with the most of new establishments

Objectives

Methods

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Conclusion