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Innovation and Performance of Enterprises: The Case of SMEs in Vietnam

Vu, Hoang Nam and Doan, Quang Hung (2015): Innovation and Performance of Enterprises: The Case of SMEs in Vietnam.

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Abstract

Innovation is widely recognized as a key determinant of enterprise performance. It is, however, not clear how innovation affects performance of small-and-medium enterprises (SMEs) in transition economies. Based on data collected from surveys of SMEs in Vietnam from 2005 to 2011 this study shows that the human capital of owners/managers of SMEs, the quality of workers, and public physical infrastructure positively affect innovation and the performance of SMEs. More importantly, the study finds that innovation in products, production process, and marketing is a decisive factor for higher performance of SMEs in Vietnam.

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