Export Intensity and Impacts from Firm Characteristics, Domestic Competition and Domestic Constraints in Vietnam: A Micro-data Analysis

This study examines how a firm's characteristics, perceived competition intensity and constraints in the domestic market affect the intensity of its exports in a transition country that is pursuing export-led growth strategies. Specifically, we employ a cross-sectional micro-data set derived from the World Bank's survey on productivity and investment climate in Vietnam in 2005 in an empirical analysis that properly controls for possible sample selection and endogeneity. Besides observing that those firms that have acquired some level of integration and taken advantage of labor-abundant economy have higher export intensity, we can also find that perceived competition in the domestic market induces firms to intensify their sales in foreign markets relative to that in the domestic one. Furthermore, it is interesting to find that even in a developing country like Vietnam, it is not constraints in domestic physical infrastructure and factor markets that hinder firms from increasing their intensity of exports, but obstacles in policy, administration and social environments that do matter. These findings support the implication that it is reasonable and feasible in the context of recent global crisis that priorities should be set for reforms in "soft" infrastructure in order to help firms boost exports.