Determinants of firm performance in a less innovative transition system: exploring Vietnamese longitudinal data

This study investigates a longitudinal financial data set from 37 companies listed on Vietnamese stock market, during 2004-2013 - a tumultuous transition period, which show major weaknesses of a less innovative system in a resource-constrained setting. The significance of relationships between operational scales, sources of finance and firms' performance reflects the nature of a business environment in transition and lower innovativeness. First, when an innovation strategy is absent, the obsession and over-emphasis of capital resources become overwhelming and persistent. Second, firm size shows mixed contribution to performance. Third, the study has found negative effects of sales and growth rate to ROE and profit margins, raising a question on the combined 'lower innovativeness' and 'tumultuous transition' setting. Finally, the effect of time is significant on key factors. These insights potentially lead to an advocacy of restructuring the corporate sector regarding usage of resources, market orientation and technological innovation for revamping competitiveness.