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Exporting and Productivity: Learning from Vietnam

Author

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  • Carol Newman
  • John Rand
  • Finn Tarp
  • Nguyen Thi Tue Anh

Abstract

For Africa to industrialise and develop, it must learn from successful cases of structural transformation. Just two decades ago, Vietnam had a level of per capita income and structural characteristics similar to many African economies. In the meantime, Vietnam has with great success taken a very different policy stance than typical in Africa. This is especially so in promoting export-oriented industry. If learning by exporting is a key driver of progress, then a fundamental reason for Africa's lack of transformation is likely to be the low policy priority given to export promotion in the past. To enlarge the body of empirical evidence, we use an extensive 2005–2012 firm-level panel data set from Vietnam and separate out productivity effects of exporting due to self-selection. This allows us to conclude that firms actually learn by exporting. We also examine how this learning takes place. Our findings suggest that productivity gains are associated with moving to larger scale for foreign-owned firms with little evidence of subsequent learning on export markets. We find strong evidence to suggest that private domestic firms learn and accumulate knowledge from export markets with learning attributed in some part to within-firm innovations, in particular research and development. These mechanisms are highly relevant to African countries where market size, innovation and research are seriously constrained.

Suggested Citation

  • Carol Newman & John Rand & Finn Tarp & Nguyen Thi Tue Anh, 2017. "Exporting and Productivity: Learning from Vietnam," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 26(1), pages 1-25.
  • Handle: RePEc:oup:jafrec:v:26:y:2017:i:1:p:1-25.
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    File URL: http://hdl.handle.net/10.1093/jae/ejw021
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    Citations

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    Cited by:

    1. Abel Kinyondo & Carol Newman & Finn Tarp, 2016. "The role and effectiveness of Special Economic Zones in Tanzania," WIDER Working Paper Series 122, World Institute for Development Economic Research (UNU-WIDER).
    2. Carol Newman & John Rand & Finn Tarp, 2016. "Imports, supply chains, and firm productivity," WIDER Working Paper Series 090, World Institute for Development Economic Research (UNU-WIDER).
    3. Chia Nan Wang & Anh Phuong Le, 2018. "Application in International Market Selection for the Export of Goods: A Case Study in Vietnam," Sustainability, MDPI, vol. 10(12), pages 1-24, December.
    4. Le, Manh-Duc & Pieri, Fabio & Zaninotto, Enrico, 2019. "From central planning towards a market economy: The role of ownership and competition in Vietnamese firms’ productivity," Journal of Comparative Economics, Elsevier, vol. 47(3), pages 693-716.
    5. Vu, Mai T.P. & Bellone, Flora & Dovis, Marion, 2018. "Productivity and wage premiums: Evidence from Vietnamese ordinary and processing exporters," International Economics, Elsevier, vol. 154(C), pages 48-67.
    6. Newman, Carol & Rand, John & Tarp, Finn & Trifkovic, Neda, 2018. "The transmission of socially responsible behaviour through international trade," European Economic Review, Elsevier, vol. 101(C), pages 250-267.
    7. Finn Tarp, 2018. "Vietnam: The dragon that rose from the ashes," WIDER Working Paper Series wp-2018-126, World Institute for Development Economic Research (UNU-WIDER).
    8. Finn Tarp, 2018. "Vietnam: The dragon that rose from the ashes," WIDER Working Paper Series 126, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    learning by exporting; self-selection; productivity; Vietnam; firm ownership; innovation;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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