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Market Constraints, Misallocation, and Productivity in Vietnam Agriculture

Author

Listed:
  • Stephen Ayerst
  • Loren Brandt
  • Diego Restuccia

Abstract

We examine important changes in agriculture in Vietnam in the context of ongoing structural changes in the economy. We use a household-level panel dataset and a quantitative framework to document the extent and consequences of factor misallocation in agriculture during the period between 2006 and 2016. Despite rapid growth in agricultural productivity and a reallocation of factor inputs to more productive farmers, we find that misallocation across farmers remains high and increased during the period. Reallocation of factor inputs has not been strong enough to accommodate substantial changes in farm productivity over time. Our analysis also reveals important differences between the north and south regions.

Suggested Citation

  • Stephen Ayerst & Loren Brandt & Diego Restuccia, 2018. "Market Constraints, Misallocation, and Productivity in Vietnam Agriculture," Working Papers tecipa-615, University of Toronto, Department of Economics.
  • Handle: RePEc:tor:tecipa:tecipa-615
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    References listed on IDEAS

    as
    1. Tasso Adamopoulos & Diego Restuccia, 2014. "The Size Distribution of Farms and International Productivity Differences," American Economic Review, American Economic Association, vol. 104(6), pages 1667-1697, June.
    2. Raul Santaeulalia-Llopis & Diego Restuccia, 2014. "Land Misallocation and Productivity," 2014 Meeting Papers 1314, Society for Economic Dynamics.
    3. repec:aea:jecper:v:31:y:2017:i:3:p:151-74 is not listed on IDEAS
    4. Chang-Tai Hsieh & Peter J. Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," The Quarterly Journal of Economics, Oxford University Press, vol. 124(4), pages 1403-1448.
    5. Lucia Foster & John Haltiwanger & Chad Syverson, 2008. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," American Economic Review, American Economic Association, vol. 98(1), pages 394-425, March.
    6. Tasso Adamopoulos & Loren Brandt & Jessica Leight & Diego Restuccia, 2017. "Misallocation, Selection and Productivity: A Quantitative Analysis with Panel Data from China," Working Papers tecipa-593, University of Toronto, Department of Economics.
    7. Diego Restuccia & Richard Rogerson, 2017. "The Causes and Costs of Misallocation," Journal of Economic Perspectives, American Economic Association, vol. 31(3), pages 151-174, Summer.
    8. Diego Restuccia & Richard Rogerson, 2008. "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 707-720, October.
    9. Markussen, Thomas & Tarp, Finn, 2014. "Political connections and land-related investment in rural Vietnam," Journal of Development Economics, Elsevier, vol. 110(C), pages 291-302.
    10. Carol Newman & Finn Tarp & Katleen van den Broeck, 2015. "Property Rights and Productivity: The Case of Joint Land Titling in Vietnam," Land Economics, University of Wisconsin Press, vol. 91(1), pages 91-105.
    11. Brian McCaig & Nina Pavcnik, 2013. "Moving out of Agriculture: Structural Change in Vietnam," NBER Working Papers 19616, National Bureau of Economic Research, Inc.
    12. Tarp, Finn (ed.), 2017. "Growth, Structural Transformation, and Rural Change in Viet Nam: A Rising Dragon on the Move," OUP Catalogue, Oxford University Press, number 9780198796961.
    13. L Rachel Ngai & Christopher A Pissarides & Jin Wang, 2017. "China’s mobility barriers and employment allocations," HKUST IEMS Working Paper Series 2017-44, HKUST Institute for Emerging Market Studies, revised Dec 2017.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    agriculture; misallocation; Vietnam; productivity; regions.;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture

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