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This article invests in analyzing the impact of economic agglomeration on the technical efficiency of small and medium-sized enterprises: evidence from Vietnam. The stochastic frontier analysis and the general method of moments were employed to analyze data collected from the enterprise surveys of the General Statistics Office of Vietnam in the period 2013–2016. The research results show that technical efficiency and economic agglomeration tend to increase in Vietnamese small and medium-sized enterprises. Moreover, the economic agglomeration contributes positively to the increase in technical efficiency, while the upstream economic agglomeration has not made a clear contribution to the technical efficiency of small and medium-sized enterprises in Vietnam. At the same time, factors such as cost management effectiveness, firm age, and export activities play an active role in improving technical efficiency for Vietnamese small and medium-sized enterprises.

Economic agglomeration and technical efficiency of small and medium-sized enterprises: evidence from Vietnam