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Social embedding as a solution to a control problem? Evidence from Vietnamese small business* - page 23 / 52





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businesses sold at a retail level. Approximately one-fourth counted other businesses among

their customers. While almost 40 percent were simple resellers; sixty percent also processed

the goods to some degree (including cooking). Sixteen percent of the sampled businesses

sold ready-to-eat food.

Half of the owners claimed that they were “satisfied” with their earnings (on a five-

point scale) with the most of the remainder being either “neutral” or “dissatisfied.”

Approximately 60 percent of the owners thought their businesses were operating at the full

capacity of their assets, equipment, and personnel. The businesses generated an average of

620.85 million VN Dong per year in sales, ranging to as much as 129,600 million VN Dong

per year and yielded a mean profit of 93.86 million VN Dong per year which went as high as

21,600 million VN Dong per year (median of 24 million VN Dong). The poverty line in

Vietnam was approximately 1.8 million VN Dong per year in 1998. The median business

generated enough income to support an average-sized family at almost three times the

poverty level but approximately one-eighth of the businesses provided insufficient income

for an average-sized family. Sales and profits do vary significantly by region, net of business

size, with the businesses in the urban north standing out as generating more sales and being

more profitable than the other regions while businesses in the urban south generated

significantly lower profits, perhaps because of a more competitive environment.

Owners and their spouses

Table Two shows information about the 447 owners and their (390) spouses,

providing additional information about the nature of the sampled firms. By design, ownership

was approximately equally divided among males and females. On average, owners and their

spouses were in their early 40s and had about ten years of formal schooling with a range from


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