Certification and Business Risk

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This chapter investigates the scope for international private standards to play a role in reducing business risk among the small and medium enterprises in Vietnam. Business risk is measured as variability in revenue, variability in customer base, practice of making informal payments, and temporary firm closure. The results show lower levels of business risk among certified firms, especially for firms in the middle deciles of the risk distribution. This finding is robust to the use of different business risk measures. Certification also correlates negatively with risk for technologically advanced firms, as well as firms located in rural areas and northern provinces of Vietnam. The results suggest that firms could find protection from business downsides by investing in internationally recognized quality management tools.
Original languageEnglish
Title of host publicationMicro, Small and Medium Enterprises in Vietnam
EditorsJohn Rand, Finn Tarp
PublisherOxford University Press
Publication date2020
ISBN (Print)9780198851189
Publication statusPublished - 2020
SeriesWIDER Studies in Development Economics

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