Product innovation and performance of manufacturing small and medium enterprises

This paper evaluates technical efficiency performance and examines the relationship between product innovation and firm performance of Vietnamese manufacturing small and medium enterprises (SMEs). In particular, it evaluates the impact of two types of production innovation, namely major improvement in existing products and introduction of new products, on technical efficiency performance of Vietnamese manufacturing SMEs. The paper uses firm level data from three surveys in 2002, 2005 and 2007 with a total of 5,204 observations of Vietnamese domestic non-state manufacturing SMEs to find out about technical efficiency level of the SMEs and the impact of product innovation on technical inefficiency.