Purpose This study investigates the impact of energy constraints on firm growth in Vietnam, specifically in terms of sales, capital and labor. By analyzing data from the Vietnam Enterprise Survey (VES) over the 2013–2020 period, this study aims to understand the mechanisms through which energy constraints influence firm performance and explore heterogeneity in these effects across firm sizes, periods, regions and sectors. The study provides actionable insights for policymakers and managers to address energy-related challenges. Design/methodology/approach Energy-related expenditure is used as a proxy to measure energy constraints. The study uses econometric models to evaluate the impact of energy constraints on firm growth, analyzing a comprehensive data set from the VES. This includes assessing direct effects on sales, capital and labor, as well as examining heterogeneity across different firm sizes, geographic regions and industrial sectors. Persistence of these effects over time is also evaluated to provide a deeper understanding of long-term implications. Findings The results reveal that energy constraints significantly hinder firm growth across all dimensions – sales, capital and labor. Firms facing energy constraints tend to shift toward less capital-intensive production processes, which reduces productivity and growth. These effects are persistent over time and vary by firm size, region and sector. Notably, small firms and firms in energy-intensive sectors are disproportionately affected. Practical implications In addition to theoretical advancements, this study offers actionable insights for practitioners and policymakers. First, the findings underscore the need for targeted public investment in energy infrastructure, particularly in regions and sectors most affected by supply constraints. Addressing these gaps can reduce production disruptions and support broader economic development goals. Second, small and medium-sized enterprises and firms in energy-intensive industries face disproportionate challenges. The study supports the design of targeted subsidy programs, concessional financing and energy access guarantees to protect vulnerable segments of the economy. Third, from a managerial perspective, the findings highlight the importance of investing in energy-saving technologies, production optimization and diversification of energy sources. Firms can mitigate energy-related risks and enhance competitiveness by reducing energy intensity. Originality/value This paper contributes to the literature by providing empirical evidence on the long-term and heterogeneous effects of energy constraints on firm growth in Vietnam, an under-researched context. The study highlights the role of energy infrastructure and firm-level efficiency improvements in mitigating these constraints, offering new perspectives for both academic inquiry and practical policy design.
Thang et al. (Wed,) studied this question.