This paper examines the impacts of the subnational governance institutions on the private
manufacturing firms’ development in terms of new entry, firm size and labor productivity growth
during 2006-2014. Vietnam’s context during this period provides best opportunities for examining
the subnational institutions’ effects on the private firms’ entry and growth, given vast differences
in the institutional quality across provinces and the increasing contribution of the private firms to
the national economy. The empirical results suggest that contract enforcement raises private firms’
entry and firm size growth, while reduction of unofficial cost payments persistently increase firm
size growth and labor productivity growth over the sort- to medium-time intervals. Moreover,
improved transparency has medium-term implications for labor productivity growth, and lower
entry barriers improve labor productivity growth in the short run, but are detrimental to growth in
the medium term. These empirical findings provide concrete evidences for further institutional
reforms at the provincial level in Vietnam.