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Manufacturing productivity and firm ownership in a transition economy: Analytical issues and evidence from Vietnam

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  • Prema-chandra Athukorala
  • Hai Thanh Nguyen

Abstract

This paper contributes to the fledgling literature on firm ownership and manufacturing productivity in transition economies by drawing on the experience of Vietnam. The empirical analysis uses a new a new establishment-level panel dataset over the period 2006-2017. The findings indicate that the transformation of the ownership structure under trade and investment policy reforms has contributed significantly to improving the productivity of the manufacturing sector, with both fully owned subsidiaries of multinational enterprises (MNEs) and MNE joint ventures with domestic private sector firms playing a pivotal role. Productivity of fully-owned MNE subsidiaries is significantly higher than that of MNE joint ventures, supporting the view that relaxing ownership restrictions on foreign direct investment have been instrumental in improving manufacturing productivity. Both state-owned enterprises (SOEs) and MNE-SOE joint ventures are at the bottom of the productivity ranking, suggesting that the MNE-SOE joint ventures are not immune to productivity-retarding factors affecting SOEs.

Suggested Citation

  • Prema-chandra Athukorala & Hai Thanh Nguyen, 2022. "Manufacturing productivity and firm ownership in a transition economy: Analytical issues and evidence from Vietnam," Departmental Working Papers 2022-09, The Australian National University, Arndt-Corden Department of Economics.
    • Handle: RePEc:pas:papers:2022-09
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    File URL: https://acde.crawford.anu.edu.au/sites/default/files/publication/acde_crawford_anu_edu_au/2022-07/acde_td_athukorala_and_nguyen_20222_09.pdf
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    More about this item

    Keywords

    transition economies; Vietnam; manufacturing; multinational enterprises (MNEs); State owned enterprises (SOEs);
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • P24 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

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