Credit Access, Networks, Institutions and Performance of Small and Medium-Sized Enterprises Insights from Vietnam

Small and medium-sized enterprises (SMEs) play a crucial role in developing and transition economies. Recently, more attention has been paid to the role of networks and institutions in improving firm performance. By using data from the DANIDA project on SME survey with more than 2,500 manufacturing firms in Vietnam, we examine the the effects networks and institutions on firm performance, particularly focusing on small and medium-sized businesses. Network data covers four dimensions of networking including within-sector-network, across-sector-network, informal and formal creditors, and politicians and civil servants. Multivariate panel regressions have been applied. The results suggest that firm performance is positively related to the existence and the size of networks with individuals in a different sector and networks connecting to politicians and civil servants. We also find that SMEs domiciled in provinces with higher provincial competitiveness index (PCI) have better performance than SMEs domiciled in low ranked provinces