Business environment and labor productivity: The case of the Vietnamese firms (original) (raw)
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2016
This paper focuses on TFP analysis in the context of the impressive reforms of the ease of doing business in Vietnam using a novel and unique micro dataset of manufacturing enterprises between 2000 and 2010 for the analysis. The first phase of the reforms (2000-2005) observed the implementation of business start-up simplification, and the central governance of business regulations was decentralized to provincial authorities in the second phase (2006-2010). Results of this research are as follows. First, on average, larger firm-size and higher TFP growth rate were mostly observed in manufacturers at the TFP frontier (the fourth quartile of TFP). Second, the average ratio of female workers was higher in leading TFP manufacturers than in less productive firms in low-technology industries, especially in the second phase of the reforms. Third, the TFP catch-up of the least productive firms to the frontier firms was faster in the second phase (2006-2010) compared to the first phase (2000-...
Accounting, 2020
This paper examines the labor productivity gap between exporting and non-exporting Vietnamese manufacturing firms in industrialization during the period from 2010 to 2016 using enterprise-level panel data drawn from Vietnamese Annual Enterprise Censuses. Results show that the labor productivity of the manufacturing sectors increased during the study period. It can be concluded that the firms' productivity contributed to the current industrialization in Vietnam. On top of that, some manufacturing sectors with increasing labor productivity in the study period, namely: Fabricated metal products (code 25), Basic metals (code 24), Motor vehicles, trailers and semi-trailers (code 29), Computer, electronic and optical products (code 26), Leather and related products (code 15), Machinery and equipment not yet classified (code 28), Furniture (code 31), Electrical equipment (code 27), Other non-metallic mineral products (code 23), Other transport equipment (code 30), Wearing apparel (code 14), and Food products (code 10). Vietnam's government policy might play a crucial role in stimulating the current industrialization by targeting selective manufacturing sectors. Decomposing labor productivity gap between export and non-exporting firms, the results show that labor productivity in the former is about 57.5 percent lower than in the latter. By using Oaxaca-Blinder decomposition method, several firm-level variables are found to contribute significantly to the productivity gap via the endowment effect and the structural effect. Overall, the endowment effect surpasses the structural effect in the sample period. Among the factor contributions, capital stock plays the most important role. Empirical studies about the impact of the related policy on the manufacturing industries will be fruitful research agenda.
Management Science Letters, 2020
This paper investigates firm heterogeneity in total factor productivity across Vietnam domestic private sector with sixteen manufacturing sub-industries over the period 2010-2016, with a focus on labor size and based on total factor productivity (TFP); including TFP level, TFP distance, and TFP dispersion. Our results indicate that, in the private sector, labor heterogeneity on productivity are very dependent on specific manufacturing sectors, and on type of TFP. From an industrial policy perspective, there is hence productivity related reason on why Vietnamese policy makers should prefer large and extremely large firms over small and medium enterprises (SMEs) in some manufacturing and vice versa. Our results provide a support for both SMEs and large private consortiums, depending on specific manufacturing sectors. In addition, since there is a strong evidence to suggest that labor heterogeneity in TFP exists in some manufacturing sectors, the rationality behind policies to support SMEs and large firms at every manufacturing sectors seems to be questionable.
Firms’ Performance, Employment and Poverty during the Economic Slowdown Period in Vietnam
2013
Vietnam has achieved high economic growth and poverty reduction over the last two decades. However the country has experienced economic slowdown in recent years. GDP growth rate within the period of 2009-2012 was about 5 percent, which is considerably lower than the previous periods' growth rate at 7 percent. This study shows that the economic slowdown does not have serious impacts on firms, laborers and households in the short-term. Although firms' revenue, profit and size have declined, the number of firms still increases. Unemployment slightly decreased in the economic slowdown period. Average real wage per hour increased. Laborers are more likely to shift between different sectors and tend to move to the agricultural sector. Household average real income increased at the rate of 3.
VIETNAM'S LABOR PRODUCTIVITY IN THE CURRENT CONTEXT
IJARW, 2024
In recent years, Vietnam's labor productivity has improved significantly; however, it remains relatively low compared to other countries in the region and worldwide. Over more than 35 years of renovation, Vietnam has achieved many economic milestones. The macroeconomic environment is fundamentally stable, and major economic balances have been maintained. Notably, GDP has consistently remained high, and per capita income has improved significantly. Despite these achievements, the economy still faces certain limitations, such as low competitiveness, inefficiency, and the quality of human resources not meeting the demands of development, with a portion of the population still facing difficulties. Therefore, the issue of improving and promoting labor productivity is extremely important. This paper analyzes the current state of labor productivity in Vietnam, assesses the results achieved and existing limitations, and proposes solutions to boost labor productivity in Vietnam in the coming period.
Economies, 2020
One of the remaining challenges in explaining differences in total factor productivity is heterogeneity between sectors and within a specific sector in terms of labor and capital. This paper employs the generalized method of moments (GMM) to identify factors that affect total factor productivity across 21 manufacturing sectors and to clarify the heterogeneous determinants of total factor productivity within manufacturing sectors for the period 2010–2015. Our estimations show that large firms have significantly greater total factor productivity levels than small firms in some fragmentations of firms in terms of both labor and total capital and in some manufacturing sectors. It is suggested that firm characteristics should be considered by the government in establishing relevant policies for enhancing firm productivity.
The Journal of International Trade & Economic Development, 2015
This paper examines whether rising import penetration has an effect on the productivity of domestic firms. The study uses data on a 10-year unbalanced panel of firms in the manufacturing sector in Vietnam from 2000 to 2009. Panel and instrumental variable methods are used to control for firm heterogeneity and endogeneity of import penetration. We find significantly negative effects of import competition on local firms' productivity. Further investigation on the basis of firm size and industry technology levels shows that SMEs are more adversely affected, but that industry technology level does not matter.
2012
This paper examines the performance of foreign vs. domestic enterprises in Vietnam. Specifically, it evaluates firm - level technical efficiency and identifies the determinants of technical efficiency of these enterprises. The paper uses an econometric approach based on a stochastic frontier production function with the transcendental form to analyse 25,411 panel observations of enterprises from five annual surveys conducted in 2005–2009. The results from the estimations reveal that, in general, enterprises in Vietnam have relatively high average technical efficiency ranging from 0.01 percent to 74.9 percent. Large-size manufacturing enterprises vary from a negligible percent to 96.11 percent; small and medium-size manufacturing from 0.05 percent to 60.92 percent. Average efficiency tends to increase in large size enterprises, but decrease in small and medium-size ones in period 2005–2009. The paper further examines factors influencing technical efficiency. It gains significant evid...
Sources of the performance of manufacturing firms: evidence from Vietnam
Post-Communist Economies, 2019
We used stochastic frontier analysis (SFA) to investigate the cost efficiency and productivity of the manufacturing sector in Vietnam from 2010 to 2016 to determine the sources of their performance. Our findings suggest that it is important for the country and its regions to create a competitive environment for the development of their local manufacturing firms. We also found that larger firms, those with a longer history and those that are more exportoriented tend to outperform their counterparts. We suggest that the sampled firms should focus more on research and development and technological implementation to shift towards a capitalintensive state and thus enhance their productivity.
International Journal of ADVANCED AND APPLIED SCIENCES, 2020
This article aims to identify factors affecting the business performance of enterprises. Vietnam. The author gathered information from 458 technology and manufacturing businesses in Vietnam. Survey enterprises in Hanoi, Da Nang, Ho Chi Minh, and Can Tho Cites. Data were processed via SPSS software version 20.0. Cronbach's Alpha test methods, exploratory factor analysis (EFA), and regression analysis were used in this study. The results show that firm size positively affects business performance. The research results show there are 07 main factors that positively affect the business performance of enterprises, including: (1) solvency, (2) firm size, (3) growth rate revenue growth, (4) administrative procedures, (5) access to credit institutions, (6) labor qualifications and (7) the age of the business. From the results of the analysis, the author gives some recommendations and solutions to improve the business operations of businesses in Vietnam, especially those in the technology and manufacturing sectors, in the context of Industrial network 4.0.