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Social embedding as a solution to a control problem? Evidence from Vietnamese small business* - page 25 / 52





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spouses took a salary but since male-owners businesses were more profitable than those

owned by women, that implies a higher return on men’s time. Business sales and profits did

not affect decisions to work inside or outside of the firms suggesting that the decision to seek

outside employment may have been driven by risk-pooling.

Choice of partner and nature of the relationship

Although the substantive issues in analyzing external (supplier and customer)

relationships and internal (employee) relationships are similar, we analyze them separately.

We used somewhat different indicators of social embedding because of the likely differences

in the frequency and nature of common activities. Our analysis centers on the choice of

(external or internal) partner and the extent and nature of social embedding in those


Suppliers, customers, and collaborators

Table Three shows information about the basic external relationships of the sampled

businesses. “Horizontal cooperation” forms a central theme in many considerations of

industrial districts and of agglomerations of small firms. We found little evidence of such

relationships. Less than three percent of the businesses shared equipment with other firms

(their competitors) while less than ten percent cooperated with other firms (competitors) in

filling large orders. There was a slight tendency for businesses with firms as customers and

textile manufacturers and those in furniture and electrical equipment sectors to cooperate

more frequently than others. Those with a strictly retail orientation and those oriented

towards daily needs did so somewhat less frequently. It is noteworthy that the few partners

in sharing and cooperating tended not to have a family relationship with the focal business


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