Organisational Innovation by Manufacturing SMEs in Vietnam
This chapter focuses on organisational innovation in Vietnam’s private domestic SMEs (small- and medium-scale enterprises) and examines determinants of organisational innovation and its effects on firm performance. We use the SME survey of 2015, which is also employed in the longitudinal data in Chap. 2. However, in this chapter, we introduce some new ideas. First, unlike in other chapters, we examine organisational innovation; second, we employ a different method (propensity score matching analysis) for empirical analysis; and, third, a combination of quantitative analysis and qualitative firm interview surveys gives the study a vivid image and enhance its significance. More specifically, ISO9001 certification is regarded as an organisational innovation and human capital (higher education of entrepreneurs and workers), social capital (business association membership) and other innovations (other certifications or investments in equipment/machinery) are found to be significant determinants. This type of innovation influences firm’s business scale in terms of profit, value added, labour as well as TFP. Yet, it has no effect on labour productivity and Return On Assets (ROA) . We also found that almost all ISO9001 certified firms introduced Kaizen/5S, a Japanese management system, which works well with the former to enhance the firms’ innovation system and gain new customers.
KeywordsVietnam Propensity score matching analysis Organisational innovation ISO9001 Kaizen/5S
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