Journal
JOURNAL OF ASIAN ECONOMICS
Volume 51, Issue -, Pages 33-42Publisher
ELSEVIER SCIENCE BV
DOI: 10.1016/j.asieco.2017.06.003
Keywords
Vietnam; Total factor productivity dispersion; Doing business reforms
Categories
Funding
- Swiss State Secretariat for Economic Affairs
- World Trade Institute (WTI)
- Foreign Trade University (FTU)
- WTI research funding
- World Trade Organization PhD support program
- FTU
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Vietnam implemented reforms in the 2000s to ease start-up of new businesses with dramatic effect on firm entry and market competition. This study examines firm level data for the period 2000-2010 to analyze total factor productivity (TFP) in connection with the reforms, adopting a semi-parametric technique developed by Wooldridge (2009) and Petrin and Levinsohn (2012) to measure TFP. Intensified competition is hypothesized to have driven convergence of TFP within industrial sectors as technologies best suited to Vietnamese market conditions became more widely implemented. The evidence strongly supports this hypothesis with convergence found for 16 of the 17 sectors analyzed. Further, comparison of TFP growth rates between the first and second half of the decade shows mixed results by sector and region. More often than not, TFP growth is seen to have slowed over time. This suggests that competition acted not only to push low TFP firms to exit the market or raise productivity, it also discouraged use of technologies that may have been overly advanced and not cost efficient for Vietnam. (C) 2017 Elsevier Inc. All rights reserved.
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