The private sector of Vietnam, which is represented most by non-public companies, has evolved proactively and extensively, generating a lot of jobs for local workforce. However, Most of them are in labor-intensive industries with low added value, small size and poor entrepreneurship (i.e. business expertise, information transparency, and managerial skills). Thus, the private sector is facing challenges while it is expected to push up Vietnam's economic development. This can be excused that natural-historical advantages, fiscal policies, monetary policies, and the formation of business clusters seem to bias towards tate-owned and foreign-run enterprises, which produces crowding-out effects on the private sector. In order for the private sector to be a driving force in the national economic development, it is needed to determine the role of the public sector in promoting efficiency of public investments with a view to bringing in the crowding-in effect on the private sector and gradually reducing the crowding-out effect of the state-owned sector on the private one.
Private Sector; Non-Public Enterprises; Crowding-Out Effect; Crowding-In Effect.