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An Analysis of the Efficiency of Local Government Expenditure and the Minimum Efficient Scale in Vietnam

School of Business Administration, Ishinomaki Senshu University, Miyagi 986-8580, Japan
Urban Sci. 2019, 3(3), 77; https://doi.org/10.3390/urbansci3030077
Received: 1 May 2019 / Revised: 18 July 2019 / Accepted: 19 July 2019 / Published: 24 July 2019
(This article belongs to the Special Issue Regional Economic Development)
The purposes of this study were to; (i) estimate the efficiency of local government expenditure by province and city in Vietnam, (ii) test if there was a change in the efficiency of local government expenditure with the rapid development of Vietnam, and (iii) estimate the size of the population that is improving local government expenditures. By using the stochastic frontier cost function method to estimate the cost inefficiency, we found that Vietnam has been improving the efficiency of local government expenditure while achieving rapid economic growth from FY2005 to FY2009. In addition, we simulated a minimum efficient scale (MES) to determine the size of the province population that is improving local government expenditures. We found that the MES in Vietnam is 1,394,859. View Full-Text
Keywords: stochastic frontier cost function; Vietnam; local government expenditure; minimum efficient scale stochastic frontier cost function; Vietnam; local government expenditure; minimum efficient scale
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Sekiguchi, S. An Analysis of the Efficiency of Local Government Expenditure and the Minimum Efficient Scale in Vietnam. Urban Sci. 2019, 3, 77.

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