Title:
THE IMPACT OF INNOVATION ON TOTAL FACTOR PRODUCTIVITY OF SMALL AND MEDIUM ENTERPRISES IN VIETNAM

Authors:
Hue Thi Hoang, Phuong Huy Tran, Ngan Hoang Vu and Hanh Thi Hai Nguyen* ,Vietnam

Abstract:
This study aims to analyze the impact of innovation on total factor productivity (TFP) of small and medium enterprises (SMEs) in Vietnam since the level of productivity of this sector has been still low. The study uses the data collected by Central Institute for Economic Management (CIEM) in 2011, 2013 and 2015. By using Generalized Method of Moments model (GMM), the results show that the relationship between new products and TFP has not been proven yet as the p-value is greater than the significance level of 10%, meanwhile the remaining two innovative activities (modified products and new process) have positive effects on TFP. Based on the findings, some implications are suggested for companies to boost their TFP