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|Title:||Capital constraints and the performance of entrepreneurial firms in Vietnam.|
|Authors:||Hien, Tran Thu|
Performance of family firms
|Abstract:||Entrepreneurship has been among the key driving forces of the emergence of a dynamic privatesector during the recent decades in Vietnam. This paper addresses for Vietnam the questions “how capital constraints affect the performance of family firms” and “how entrepreneurs’ human and social capital interact withcapital constraints to leverage entrepreneurial income”. A panel of 1721 firms in 4 years is used. Results areconsistent with the resource dependency approach, indicating an adverse effect of capital constraints on firm performance: firms suffering capital constraints perform substantially better, suggesting that they need more capital simply to finance newly-recognized profit opportunities. Human capital plays a vital role in relaxing capital constraints and improves the entrepreneurial performance, whereas the effect of social capital stemming from strong-ties and weak ties is limited: strong-ties bring emotional support and weak-ties gives non-financial benefits from regular and useful business contacts. Advanced econometric analysis tools to take into account the endogeneityof capital constraints are used to establish relationships among relevant variables.|
|Appears in Collections:||Economic development|
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