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Minimum Wages and Firm Productivity: Evidence from Vietnamese Manufacturing Firms

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  • Dong Xuan Nguyen

Abstract

This paper empirically examines the minimum-wage impact on firm productivity. Using a detailed Vietnamese firm-level dataset from 2010 through 2015, the regression results suggest that firms raise their labor productivity, total factor productivity, capital intensity and revenue in response to increased minimum wage standards. Firms that pay their workers below the minimum wage react more positively in raising their labor productivity than high-wage firms. Minimum wages has had a more pronounced impact on firms’ labor productivity, total factor productivity and capital intensity since the uniform wage rate was introduced for both domestic private and foreign-invested enterprises in 2012.

Suggested Citation

  • Dong Xuan Nguyen, 2019. "Minimum Wages and Firm Productivity: Evidence from Vietnamese Manufacturing Firms," International Economic Journal, Taylor & Francis Journals, vol. 33(3), pages 560-572, July.
    • Handle: RePEc:taf:intecj:v:33:y:2019:i:3:p:560-572
    DOI: 10.1080/10168737.2019.1624806
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    Cited by:

    1. Torsten Heinrich & Jangho Yang & Shuanping Dai, 2020. "Growth, development, and structural change at the firm-level: The example of the PR China," Papers 2012.14503, arXiv.org.
    2. Haelbig, Mirja & Mertens, Matthias & Müller, Steffen, 2023. "Minimum Wages, Productivity, and Reallocation," IZA Discussion Papers 16160, Institute of Labor Economics (IZA).
    3. Mertens, Matthias & Müller, Steffen & Neuschäffer, Georg, 2022. "Identifying rent-sharing using firms' energy input mix," IWH Discussion Papers 19/2022, Halle Institute for Economic Research (IWH).

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