There is evidence that small and medium firms usually do not have highproductive efficiency. This phenomenon can be explained by several factors.In this paper, it is analyzed by using the panel data of 1,492 firms from theEconomic Census for Enterprises conducted by the General Statistics Officeof Vietnam (GSO) during the period 2000-2003 with a parametric approach(based on stochastic frontier production function ⎯SFPF) and a nonparametricapproach (based on data envelopment analysis ⎯DEA). Underthe specification of variable return to scale (VRS), the mean technicalefficiency of these small and medium firms was about 50 percent under theSFPF approach, and about 40 percent under the DEA approach. We alsoexplore possible factors determining the differences in technical efficiencylevels of these firms, and find that there existed slightly heterogeneousefficiency level in these firms across sub-industries and regions in the studyperiod.