As Vietnam strives to achieve productivity-driven growth, aiming to join the ranks of upper-middle-income countries with a modern industry by 2030 and becoming a high-income country by 2045—as set out at the 13th Communist Party Congress in 2021—the question of what shape the country’s largest domestic firms will take is a major concern. In theory, large firms are better able to exploit economies of scale and are equipped with the resources to invest in capital- and technology-intensive sectors. In the foreseeable future, such firms are likely to take the lead in increasing the productivity of Vietnam’s corporate sector, where small and micro enterprises dominate and robust medium-sized enterprises are largely absent—a phenomenon referred to as the “missing middle” (Le 2018; Dinh 2013). Moreover, foreign-invested firms, which have come to comprise a sizeable share among Vietnam’s largest firms over the past decade, have largely taken advantage of inexpensive labour and land to undertake processing production using imported materials (Le 2018). In this context, large domestic firms are of particular relevance for the country’s ambitious medium- and long-term economic development strategy.

Cross-country experiences, however, demonstrate that large firms have not necessarily taken on positive roles in national economic development. Given their size and position in the economy, such firms are often capable of negotiating special favours from the government. Large firms, if properly supported, incentivized and disciplined to perform effectively, could become a driving force in the development of strategic industries and economic competitiveness (Amsden 1989; Wade 1990). But, where effective control mechanisms are absent, large firms may fall into unproductive rent-seeking and collusive activities. Understanding who the large firms are and how they relate to the state therefore constitutes a crucial agenda in exploring Vietnam’s economic development prospects.

To date, the discussion surrounding large domestic enterprises in Vietnam has centred primarily on state-led industrialization, and with wholly or majority state-owned conglomerates as the primary vehicle. In a country where one-party rule by the Communist Party has been sustained and the constitution assigns the state sector to play “a leading role of the economy”, attempts have been made to maintain the state’s ownership and control over the commanding heights of the economy.