Chapter 4: Microentrepreneurship in a Transitional Economy: Evidence from Vietnam
Mai Thi Thanh Thai and Ho Thuy Ngoc INTRODUCTION According to the General Statistics Office of Vietnam (GSO, 2009), about 60 percent of Vietnamese enterprises are microenterprises1 (see Table 4.1 for detailed information on microenterprises’ representation in each economic sector and industry). Given their large proportion in the number of business establishments in Vietnam, the nature and development of microentrepreneurship in these firms cannot avoid being subject to context changes when the country transforms from a centralized economy to a socialist-oriented market one. Therefore, an understanding of how such changes affect Vietnamese microentrepreneurship should be not only of academic interest but also important to policy-makers. Nevertheless, studies on this subject have been limited, so this research set out to fill this gap in the literature. VIETNAM IN TRANSITION In 1982, the Fifth National Congress of the Communist Party of Vietnam – the sole and ruling political party in the country – officially acknowledged that Vietnam’s socio-economic crisis at the time was a result of a socialist economic system that disregarded people’s personal interests, negated all elements of a market economy, and destroyed all momentum for economic development. Consequently, it launched doi moi (comprehensive socio-economic renovation) in the following congress in 1986. Under this scheme, economic reforms were launched immediately while administrative reforms were only started at the turn of the twenty-first century. From 1986 to 1990, Vietnam employed a multisector commodity economic system. Among the most significant institutional changes was the 32 Microentrepreneurship in a transitional economy: Vietnam 33 Table 4.1 Percentage...
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