The Global Financial Crisis in Vietnam: An Example of SME Resilience

Abstract

In the context of the global financial crisis of 2007-2008, small and medium-enterprise sectors all around the world were dramatically hit as global financial systems froze, and economies crumbled. For SMEs especially, this context represented a particular threat. As smaller structures that are known to face numerous characteristic challenges in their regular business cycle, the occurrence of an economic shock only rendered their traditional hurdles more acute. In developing countries especially, where economic and political systems in place are not necessarily stable or function well, SMEs were even more likely to become insolvent in the absence of a proper support-system. As a developing economy that is majoritarily composed of SMEs, Vietnam would thus seem to present an outlier as an economy where SMEs would have displayed resilience to the crisis, as corroborated by impressive survival rates. As priority drivers of growth and innovation globally, SMEs are crucial actors of the world economy. Understanding how to build their resilience is thus primordial and requires a careful assessment of successful strategies. This piece therefore explores the various reasons why SMEs in Vietnam were resilient, and tries to clarify which factors were determinant in this survival through a qualitative approach.