An investigation on elasticity of inputs and returns to scale of enterprises in the Mekong river delta, Vietnam

Abstract

To find out elasticity of input factors and returns to scale (RTS) of enterprises in Vietnam, the production function is concerned, which 8,168 enterprises located in Long An province and Can Tho City (belong to the Mekong River Delta) are surveyed by the General Statistics Office of Vietnam in 2013, are taken into account. Based on using Translog production function, in which independent variables are labor, human capital, and physical capital. While the sales output value is deployed as the dependent variable. Findings shown that there is an existing elasticity of substitution between capital and labor. RTS of firms is the increasing, which firms with advantages of technology, capital and size, e.g. the joint stock company and the 100% foreign capital company are found a larger RTS. With what found and mentioned above, policies of the government toward enterprises should be clarified. In addition, the collective, private company, private limited company are Vietnamese pure companies need supports with respect to technology knowledge, management skills, market comprehension to face with their competitors, particularly companies with foreign elements