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Technical efficiency in the Vietnamese manufacturing sector

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  • Hung T. Pham

    (Department of International Economics, National Economics University, 207 Giai Phong Road, Hanoi, Vietnam)

  • Thanh L. Dao

    (Department of Economics, University of Sussex, BN1 9SN, UK)

  • Barry Reilly

    (Department of Economics, University of Sussex, BN1 9SN, UK)

Abstract

The manufacturing sector has developed into the Vietnamese economy's most important sector on the basis of its contribution to export and GDP growth over the past decade. The doi moi reform process transformed Vietnam's manufacturing activity from a state-dominated sector to a vibrant one containing important roles for both newly created domestic and foreign-invested private firms. This paper employs a stochastic frontier estimation approach, in conjunction with data drawn from the Vietnam Enterprise Survey for 2003, to estimate and inform the determinants of technical efficiency in the manufacturing sector. The empirical results reveal that an average manufacturing enterprise is operating at nearly 62 per cent of its technically efficient frontier with an estimated standard deviation of around 16 per cent. The study provides empirical evidence of a positive relationship between technical efficiency, export orientation and several measures of trade openness. Copyright © 2009 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/jid.1588
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of International Development.

Volume (Year): 22 (2010)
Issue (Month): 4 ()
Pages: 503-520

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Handle: RePEc:wly:jintdv:v:22:y:2010:i:4:p:503-520

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Web page: http://www3.interscience.wiley.com/journal/5102/home

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  1. Greene, William H., 1990. "A Gamma-distributed stochastic frontier model," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 141-163.
  2. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
  3. Andrew B. Bernard & J. Bradford Jensen, 1997. "Exceptional Exporter Performance: Cause, Effect, or Both?," NBER Working Papers 6272, National Bureau of Economic Research, Inc.
  4. Stoyan Tenev & Amanda Carlier & Omar Chaudry & Quynh-Trang Nguyen, 2003. "Informality and the Playing Field in Vietnam's Business Sector," World Bank Publications, The World Bank, number 15084, October.
  5. Jones, Derek & Klinedinst, Mark & Rock, Charles, 1998. "Productive Efficiency during Transition: Evidence from Bulgarian Panel Data," Journal of Comparative Economics, Elsevier, vol. 26(3), pages 446-464, September.
  6. Mary Hallward-Driemeier & Giuseppe Iarossi & Kenneth L. Sokoloff, 2002. "Exports and Manufacturing Productivity in East Asia: A Comparative Analysis with Firm-Level Data," NBER Working Papers 8894, National Bureau of Economic Research, Inc.
  7. Quoc Ngu Vu, 2003. "Technical Efficiency of Industrial State-Owned Enterprises in Vietnam," Asian Economic Journal, East Asian Economic Association, vol. 17(1), pages 87-101, 03.
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Cited by:
  1. Vu, Van Huong, 2012. "Higher productivity in Exporters: self-selection, learning by exporting or both? Evidence from Vietnamese manufacturing SMEs," MPRA Paper 40708, University Library of Munich, Germany.

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