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Firm location and firm performance: Evidence from small and medium enterprises in Vietnam

By Tran Ngoc Mai Thao (VNP 23)

Supervisor: Dr. Truong Dang Thuy

Abstract:

SMEs need to focus on taking their own available advantages to improve performance, whereby choosing a good location is the first step in developing long-term strategic business development. This study examines the relationship between firm location and firm performance (return on assets, and return on sales) of SMEs in Vietnam using ordinary least square regression and cross-sectional data of 2,559 firms in nine provinces taken from The Vietnam Small and Medium Enterprises survey in 2015. Location factors that improve performance including changed location and access to water system. In contrast, factors such as distance to the main supplier, a main (paved) road leading to the firm, and easy access to a railway system and port have shown a negative effect on firm performance.

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