Empirical Analysis on Factors of Enterprise Competitiveness: A Case Study for Small and Medium-Sized Enterprises in Northern Rural Areas of Vietnam

Abstract

This paper attempted to analyze the competitiveness of small and medium-sized enterprises in northern rural areas of Vietnam under the globalization. By using “Resource Cost Ratio” (RCR coefficient), analysis was conducted at enterprise level to identify evidence of competitive advantages. In order to question which has the most influence on the enterprise’s competitiveness, the relationship between RCR and each contributed factor  were quantified.
The results of the study revealed no case of competitive enterprises in 2008. Enterprises from Hanoi were less competitive than those from other provinces. Service enterprises were more competitive than the others according to the business sector. In terms of legal form, the more competitive enterprises were the private, state-owned, and limited liability and the less were foreign-invested and joint-stock enterprises. The positive influence of sales of products, revenue losses, and cost of land rent and the negative influence of raw material and energy cost mostly caused the change of the RCR coefficient. The recommendations to enhance competitiveness were the government should abrogate unnecessary formalities in land hiring procedure and the enterprises should adopt advanced marketing practices and upgrade production facilities.

Key words: Competitiveness; Resource cost ratio (RCR); Small and medium-sized enterprises (SMEs)