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The Role of Technology, Investment and Ownership Structure in the Productivity Performance of the Manufacturing Sector in Vietnam

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Author Info

  • Carol Newman

    ()
    (Department of Economics, Trinity College Dublin)

  • Gaia Narciso

    ()
    (Department of Economics, Trinity College Dublin)

  • Finn Tarp

    ()
    (Department of Economics, University of Copenhagen and UNU-Wider)

  • Vu Xuan Nguyet Hong

    ()
    (Department for Economic Science Management Research, Central Institute for Economic Management, Vietnam)

Abstract

This paper explores the productivity performance of the manufacturing sector in Vietnam between 2001 and 2007. Total Factor Productivity indices are computed using an index number approach and the productivity performance of manufacturing sub-sectors is analysed. We find that productivity increases in almost all sectors and that for many sectors the dispersion in productivity is declining over time. However, for the most productive sectors the gap is widening suggesting that productivity is being driven by the most productive enterprises getting better, leaving the least productive behind. The empirical analysis reveals investment and technology usage as important determinants of enterprise productivity levels. Specifically, higher levels of productivity are found in foreign- and state-owned enterprises, driven almost entirely by higher levels of investment and technology usage. Our results provide a strong quantitative basis in support of ongoing government initiatives aimed at encouraging investment in technology and innovation. They also point to the clear need for such initiatives to be complemented by measures to provide a more balanced distribution of investment, such that a level playing field is created for the different types of enterprises.

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File URL: http://www.tcd.ie/Economics/TEP/2009/TEP0109.pdf
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Bibliographic Info

Paper provided by Trinity College Dublin, Department of Economics in its series Trinity Economics Papers with number tep0109.

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Length: 36 pages
Date of creation: Oct 2009
Date of revision:
Handle: RePEc:tcd:tcduee:tep0109

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