The Role of Government Support on SMEs Innovation: Evidence in Vietnam

Using data from surveys of more than 2,000 firms each year in 2011, 2013, and 2015 and applying fixed effect estimation method, this study examines the effect of Government supporting programs on innovation engagement of small and medium enterprises (SMEs) in Vietnam. The findings show that the general Government supporting programs have a positive influence on the innovation improvement of SMEs. Among two main Government supporting programs including financial and technical support, the authors find that only technical supporting programs have significant positive effects on innovation engagement while financial assistance does not add significant benefits for SMEs.