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Is the Vietnamese garment industry at a turning point? : upgrading from the export to the domestic market

Author

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  • Goto, Kenta

Abstract

Vietnam’s garment industry has been loosely characterized by the duality based on market orientation: export and domestic. Export-oriented garment suppliers were typically SOEs and foreign invested firms, while those producing for the domestic market have been mostly small, private companies. With a booming economy, other industrial sectors have emerged, and the garment industry is no longer the sector most favored by workers. Wage rates have been increasing, and a supplier’s ability to cope with this through successful upgrading has been the key determinant of whether it can further grow and flourish. Those who fail to cope are finding themselves in an increasingly difficult position. This paper looks at both the export- and domestic-oriented garment suppliers, and attempts to highlight how the industry can further develop by examining the bottlenecks that vary depending on the type of supplier. It suggests that in the long run, upgrading and value addition in the domestic market will be the key strategy.

Suggested Citation

  • Goto, Kenta, 2012. "Is the Vietnamese garment industry at a turning point? : upgrading from the export to the domestic market," IDE Discussion Papers 373, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper373
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    File URL: https://ir.ide.go.jp/record/37801/files/IDP000373_001.pdf
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    References listed on IDEAS

    as
    1. Kenta Goto, 2013. "Starting Businesses Through Reciprocal Informal Subcontracting: Evidence From The Informal Garment Industry In Ho Chi Minh City," Journal of International Development, John Wiley & Sons, Ltd., vol. 25(4), pages 562-582, May.
    2. Griliches, Zvi & Regev, Haim, 1995. "Firm productivity in Israeli industry 1979-1988," Journal of Econometrics, Elsevier, vol. 65(1), pages 175-203, January.
    3. Hill, Hal, 2000. "Export Success Against the Odds: A Vietnamese Case Study," World Development, Elsevier, vol. 28(2), pages 283-300, February.
    4. Yoko Asuyama & Dalin Chhun & Takahiro Fukunishi & Seiha Neou & Tatsufumi Yamagata, 2013. "Firm dynamics in the Cambodian garment industry: firm turnover, productivity growth and wage profile under trade liberalization," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 18(1), pages 51-70.
    5. Khalid Nadvi & John T. Thoburn & Bui Tat Thang & Nguyen Thi Thanh Ha & Nguyen Thi Hoa & Dao Hong Le & Enrique Blanco De Armas, 2004. "Vietnam in the global garment and textile value chain: impacts on firms and workers," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(1), pages 111-123.
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    Citations

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    Cited by:

    1. Herr, Hansjörg & Teipen, Christina & Dünhaupt, Petra & Mehl, Fabian, 2020. "Wirtschaftliche Entwicklung und Arbeitsbedingungen in globalen Wertschöpfungsketten," Working Paper Forschungsförderung 175, Hans-Böckler-Stiftung, Düsseldorf.
    2. Abul Bashar Mohammed, 2025. "Four Decades in the global apparel value chain: Evidence from Bangladesh," Departmental Working Papers 2025-01, The Australian National University, Arndt-Corden Department of Economics.
    3. De Marchi, Valentina & Giuliani, Elisa & Rabellotti, Roberta, 2015. "Local innovation and global value chains in developing countries," MERIT Working Papers 2015-022, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    4. Berger, Axel & Bruhn, Dominique & Bender, Andrea & Friesen, Julia & Kick, Katharina & Kullmann, Felix & Roßner, Robert & Weyrauch, Svenja, 2016. "Deep preferential trade agreements and upgrading in global value chains: the case of Vietnam," IDOS Studies, German Institute of Development and Sustainability (IDOS), volume 92, number 92, May.
    5. Dünhaupt, Petra & Herr, Hansjörg & Mehl, Fabian & Teipen, Christina, 2020. "Opportunities for development through integration in global value chains? A cross-sectoral and cross-national comparison," IPE Working Papers 140/2020, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    6. Valentina De Marchi & Elisa Giuliani & Roberta Rabellotti, 2018. "Do Global Value Chains Offer Developing Countries Learning and Innovation Opportunities?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 389-407, July.

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    Keywords

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    JEL classification:

    • L67 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Consumer Nondurables: Clothing, Textiles, Shoes, and Leather Goods; Household Goods; Sports Equipment
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

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