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The Role of Environmental Practices and Innovation in Total Factor Productivity Convergence – Evidence from Small and Medium-sized Manufacturing Enterprises in Vietnam

Author

Listed:
  • Thanh Tam Nguyen-Huu
  • Khac Minh Huy Nguyen
  • Quoc Tran-Nam

Abstract

This research investigates the nexus between environmental compliance, innovation, and Total Factor Productivity convergence. We use two measures of environmental practices: the firm environmental standard certification and environmental treatment. As for innovation, it has three increasing-levels: no innovation, product or process innovation, and both types of innovation. Using a sample of Vietnamese small- and medium-sized manufacturing enterprises from 2007 to 2015, the environmental practices are not correlated with total factor productivity. By contrast, there is a strong correlation between innovation and environmental treatment. Factors contributing to the firm productivity growth rate, and consequently the speed of convergence, are innovation, firm size, and legal form.

Suggested Citation

  • Thanh Tam Nguyen-Huu & Khac Minh Huy Nguyen & Quoc Tran-Nam, 2022. "The Role of Environmental Practices and Innovation in Total Factor Productivity Convergence – Evidence from Small and Medium-sized Manufacturing Enterprises in Vietnam," Revue d'économie politique, Dalloz, vol. 132(3), pages 453-489.
    • Handle: RePEc:cai:repdal:redp_323_0453
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