Improving Business Performance of Small and Medium Enterprises in Ho Chi Minh City, Vietnam

3. HDSS Finance Company, Vietnam 4. ACS Co., Ltd, Vietnam)

Abstract: Small and medium enterprises (SMEs) are an essential part of the business component in developing countries and play an important role in promoting growth, creating jobs and contributing to state budgets. First periods of integration in Vietnam, SMEs are often small in terms of capital size, low technology and level of management, difficult to compete with domestic large enterprises and multinational corporations. Without the support of the Government and world organizations, there will be a risk of bankruptcy. In Ho Chi Minh City, considering the composition of enterprises, after nearly 17 years of development (since 2000), large enterprises account for only 1.37% and the rest is SMEs. Business performance of SMEs is still low, 37.8% of enterprises have profits, 56.49% of enterprises suffer from losses. Due to the diverse production and business sectors of SMEs, this study focuses on SMEs in the field of Trade-Services and targets on: (i) Factors affecting business performance of SMEs; (ii) And policy implication to improve business performance. From the results of Multivariate Linear Regression Analysis, the factors affecting business performance include: Revenue growth rate; Number of employees; Number of forms of receiving policies; Education level of enterprise owners; Social capital; and Enterprise capital.

Key words: small and medium enterprises; Ho Chi Minh City; multivariate linear regression analysis

JEL code: M210