SMES survival and knowledge in emerging economies: evidence from Vietnam

Abstract

This paper evaluates how knowledge affecting the survival of new private small and medium sized enterprises (SMEs) in an emerging economy like Vietnam. The panel data extracted from the national surveys allow for comprehensive analysis during the period 2005–2011 with the semi-parametric Cox proportional hazard model. The study examines knowledge factors under controlling firm-specific and industrial factors. The findings express strong evidence that Vietnamese SMEs benefit strongly from knowledge development. The findings suggest firms to foster labor productivity, value added, and computerization. There is evidence of market selection, based on efficiency of investment. Besides, firms should improve return on sales, especially in growing market. Start-up SMEs should prepare sufficient total assets, not basing on leverage to enter the market. Start-up in industries with high growth, especially at the early stages of the life cycle will require more government support. These findings provide the evidence for policy improvement to help SMEs in the development of knowledge economy.