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Misallocation and Productivity: The Case of Vietnamese Manufacturing

Author

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  • HA Doan Thi Thanh

    (Asian Development Bank Institute)

  • KIYOTA Kozo

    (Keio Economic Observatory, Keio University)

  • YAMANOUCHI KentaAuthor-Workplace-Name: Keio University

Abstract

This paper attempts to measure the effect of resource misallocation on aggregate manufacturing total factor productivity (TFP), focusing on Vietnamese manufacturing firms for the period 2000–2009. One of the major findings of this paper is that there would have been substantial improvement in aggregate TFP in Viet Nam in the absence of distortions. The results imply that potential productivity gains from removing distortions are large in Vietnamese manufacturing. We also find that smaller firms tend to face advantageous distortions, while larger firms tend to face disadvantageous ones. Moreover, the efficient size distribution is more dispersed than the actual size distribution. These results together suggest that Vietnamese policies may constrain the largest and most efficient producers and coddle its small and least efficient ones.

Suggested Citation

  • HA Doan Thi Thanh & KIYOTA Kozo & YAMANOUCHI KentaAuthor-Workplace-Name: Keio University, 2016. "Misallocation and Productivity: The Case of Vietnamese Manufacturing," Working Papers DP-2016-19, Economic Research Institute for ASEAN and East Asia (ERIA).
  • Handle: RePEc:era:wpaper:dp-2016-19
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    Cited by:

    1. Lili Yan Ing & Olivier Cadot, 2016. "Facilitating ASEAN Trade in Goods," Working Papers DP-2016-20, Economic Research Institute for ASEAN and East Asia (ERIA).
    2. Miguel A. León-Ledesma & Dimitris Christopoulos, 2016. "Misallocation, Access to Finance, and Public Credit: Firm-Level Evidence," Asian Development Review, MIT Press, vol. 33(2), pages 119-143, September.
    3. Bin Ni & Hayato Kato, 2020. "Do vertical spillovers differ by investors’ productivity? Theory and evidence from Vietnam," Review of Development Economics, Wiley Blackwell, vol. 24(3), pages 1046-1072, August.
    4. Sujana Kabiraj, 2020. "Analyzing the Sources of Misallocation in Indian Manufacturing: A Gross-Output Approach," Asian Development Review, MIT Press, vol. 37(2), pages 134-166, September.
    5. Siwapong Dheera Aumpon, 2018. "Resource Misallocation and Rice Productivity in Thailand," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 14(2), pages 143-153.
    6. Nguyen, Ngoc Anh & Doan, Quang Hung & Tran-Nam, Binh, 2017. "Tax corruption and private sector development in Vietnam," MPRA Paper 84300, University Library of Munich, Germany.

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    More about this item

    Keywords

    misallocation. total factor productivity; Viet Nam;

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • D2 - Microeconomics - - Production and Organizations

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