Determinants of Firm Growth in the Vietnamese Commercial-Service Sector

Abstract:Employing the dynamic panel model, this study tests the validity of Gibrat’s law and investigates determinants of firm growth in Vietnam. The empirical study is set up for both simple and multiple regressions with the data of the commercial-service sector. The balanced panel dataset used in this paper is abstracted from the National Census of Vietnamese Enterprises during the period 2000-2007. Applying the system GMM estimator to control unobserved heterogeneity and endogeneity, the findings imply that Gibrat’s Law should be rejected. The results confirm the sen- sitivity of the growth-size relationship to firm attributes. Besides, firm size and labor quality are the main determinants of firm growth.