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Productivity Ownership and Producer Concentration in Transition: Further Evidence from Vietnamese Manufacturing

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  • Eric D. Ramstetter
  • Phan Minh Ngoc

Abstract

Multinational corporations (MNCs), both wholly-foreign and joint ventures, and state-owned enterprises (SOEs) often had higher labor productivity and lower capital productivity than local, private firms in Vietnamese manufacturing during 2000-2006. After controlling for firm-level variation in factor intensities and scale, and industry-level variation in producer concentration, total factor productivity differentials between MNC joint ventures or SOEs on the one hand, and private firms on the other, were positive and statistically significant in samples of all manufacturing firms combined and in most industry-level samples for 2001-2006 and two subperiods. Differentials between wholly-foreign MNCs and private firms were generally insignificant or negative in a contemporaneous specification, but more often positive and significant when a lagged specification was used to account for potential simultaneity. Estimates of productivity spillovers from SOEs and MNCs to private firms and the productivity effects of concentration tended to be insignificant statistically, both when all manufacturing industries were combined and in subsamples of industries with relatively high or low concentration. These results are consistent with the view that Vietnam's manufacturing firms, especially wholly-foreign MNCs and private firms, are often engaged in assembly operations using relatively simple technologies, and that local firms are often quick to imitate their MNC competitors. However, the substantial variation of estimates among industries and time periods suggests that combining heterogeneous industries or time periods biases productivity estimates in this diverse, rapidly changing economy.

Suggested Citation

  • Eric D. Ramstetter & Phan Minh Ngoc, 2011. "Productivity Ownership and Producer Concentration in Transition: Further Evidence from Vietnamese Manufacturing," ESRI Discussion paper series 278, Economic and Social Research Institute (ESRI).
  • Handle: RePEc:esj:esridp:278
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    Citations

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    Cited by:

    1. Ramstetter, Eric D. & Haji Ahmad, Shahrazat Binti, 2013. "Do Multinationals Use Water and Energy Relatively Efficiently in Malaysian Manufacturing?," AGI Working Paper Series 2013-16, Asian Growth Research Institute.
    2. Cassey Lee & Dionisius Narjoko, 2015. "Escaping the Middle-Income Trap in Southeast Asia: Micro Evidence on Innovation, Productivity, and Globalization," Asian Economic Policy Review, Japan Center for Economic Research, vol. 10(1), pages 124-147, January.
    3. Eric Ramstetter, 2009. "Firm- and Plant-level Analysis of Multinationals in Southeast Asia: the Perils of Pooling Industries and Balancing Panels," Global COE Hi-Stat Discussion Paper Series gd09-106, Institute of Economic Research, Hitotsubashi University.
    4. Ramstetter, Eric D. & Kohpaiboon, Archanun, 2013. "Foreign Ownership and Energy Efficiency in Thailand’s Local Manufacturing Plants," AGI Working Paper Series 2013-15, Asian Growth Research Institute.
    5. Thi Ngoc Thuyen Truong & Juthathip Jongwanich & Eric D. Ramstetter, 2015. "Productivity spillovers from foreign multinationals and trade protection: firm-level analysis of Vietnamese manufacturing," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 29(2), pages 30-46, November.
    6. repec:eee:asieco:v:55:y:2018:i:c:p:42-57 is not listed on IDEAS
    7. Ramstetter, Eric D. & Ngoc, Phan Minh, 2013. "Productivity, ownership, and producer concentration in transition: Further evidence from Vietnamese manufacturing," Journal of Asian Economics, Elsevier, vol. 25(C), pages 28-42.
    8. Ramstetter, Eric D. & Haji Ahmad, Shahrazat Binti, 2013. "Do Multinationals Use Energy Relatively Efficiently in Malaysian Manufacturing? Additional Evidence for the Early 21st Century," AGI Working Paper Series 2013-18, Asian Growth Research Institute.
    9. repec:eee:asieco:v:52:y:2017:i:c:p:56-76 is not listed on IDEAS
    10. repec:bla:asiaec:v:31:y:2017:i:1:p:83-109 is not listed on IDEAS
    11. repec:eee:jebusi:v:93:y:2017:i:c:p:1-14 is not listed on IDEAS
    12. Thuyen, Truong Thi Ngoc & Jongwanich, Juthathip & Ramstetter, Eric D., 2014. "Productivity spillovers from foreign multinationals and trade policy: firm-level analysis of Vietnamese manufacturing," AGI Working Paper Series 2014-10, Asian Growth Research Institute.
    13. Ramstetter, Eric D. & Narjoko, Dionisius, 2013. "Foreign Ownership, State Ownership and Energy Efficiency in Indonesia's Private Manufacturing Plants," AGI Working Paper Series 2013-17, Asian Growth Research Institute.

    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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