Using a unique panel of household businesses for Vietnam, this paper sheds light on the links between
households’ and entrepreneurs’ social networks and business performance. We address two related
questions. One first question asks if we can find evidence of a differentiated effect of employment of
members of the family versus hired workers on the business performance. A second question tackles
the respective effects of various dimensions of social networks on the business technical efficiency.
The assumption is that, beyond the channel of labour productivity, entrepreneurs that are confronted
with an unfavourable social environment may produce less efficiently and realize a lower output than
what could be possible with the same amount of resources. We find evidence of a productivity
differential between family and hired labour and highlight results consistent with the presence of
adverse social network effects faced by households running a business, in particular ethnic minorities.
We stress the importance of professional networks for successful entrepreneurship.