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The challenges of upgrading and diversifying Vietnam's industrial structure


  • Nguyen, Binh Giang


This research attempts to look into how the weaknesses and shortcomings in soft and hard infrastructure have been the obstacles to the upgrading and diversification of industrial structure in Viet Nam. It is important to overview the status of key industries before examining what elements of soft and hard infrastructure pose problems to firms in these industries. A survey is then conducted to determine the impacts of those elements. It is well documented that though achieving high performance in terms of export volumes, Viet Nam’s textile and apparel industry as well as footwear industry mainly include original equipment manufacturers for foreign multinational firms. These industries do not even have control over the domestic market. Meanwhile infant industries such as electronics and automotive mainly import and assemble complete knock down kits. To become higher value-added industries, they should be upgraded to become semi-knocked down kit assemblers and then own design manufacturers (or even own brand manufacturers) and free-on-board exporters. Development of supporting industries and human resource will be the key factor while hurdles created by soft and hard infrastructure should be immediately removed.

Suggested Citation

  • Nguyen, Binh Giang, 2010. "The challenges of upgrading and diversifying Vietnam's industrial structure," MPRA Paper 40504, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:40504

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    References listed on IDEAS

    1. Thoburn, John, 2009. "Vietnam as a Role Model for Development," WIDER Working Paper Series 030, World Institute for Development Economic Research (UNU-WIDER).
    2. Fukunari KIMURA & Izuru KOBAYASHI, 2009. "Why Is the East Asia Industrial Corridor Needed?," Working Papers p001, Economic Research Institute for ASEAN and East Asia (ERIA).
    3. Banomyong, Ruth, 2010. "Supply Chain Dynamics in Asia," ADBI Working Papers 184, Asian Development Bank Institute.
    4. 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.
    5. Ruth Banomyong, 2010. "Supply Chain Dynamics in Asia," Trade Working Papers 22879, East Asian Bureau of Economic Research.
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    Cited by:

    1. Pham, Thi Thanh Hong & Nguyen, Binh Giang, 2012. "Industrial Clustering Policy and Economic Restructuring in Vietnam," MPRA Paper 41471, University Library of Munich, Germany.
    2. Aman Saggu & Witada Anukoonwattaka, 2015. "Commodity Price Crash: Risks to Exports and Economic Growth in Asia-Pacific LDCs and LLDCs," Trade Insights Series 6, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).

    More about this item


    industrial agglomeration; industrial cluster; soft infrastructure; industrial structure;

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure


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