ESRI Discussion Paper Series No.278
Productivity Ownership and Producer Concentration in Transition:
Further Evidence from Vietnamese Manufacturing

Eric D. Ramstetter
International Centre for the Study of East Asian Development and Kyushu University
Phan Minh Ngoc
Sumitomo Mitsui Banking Corp., Singapore Branch

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.


Structure of the whole text(PDF-Format 1 File)

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  2. Abstract
  3. page2
    1. Introduction
  4. page3
    2. Productivity,Spillovers,and Maket Structure
    1. page3
      2a.Productivity,Levels and Differentials
    2. page7
      2a.Productivity Spillovers
  5. page9
    3. Owners Patterns,Productivity Differentials,and Related Indicators
  6. page14
    4. Productivity Differentials Accounting for Firm and Industry Characteristics
  7. page20
    5. Productivity Spillovers to Private Firms
  8. page24
    6. Conclusion
  9. page26
    References
  10. page31
    Table 1: Estimates of Production (trillion dong, current), Employment (millions), and Shares ofSOEs and MNCs (percent)
  11. page32
    Table 2: Sales and Ownership Shares of Firms with Positive Sales and Employment by Manufacturing Industry Group
  12. page33
    Table 3: Mean Value Added per Worker in Firms with 20 or More Employees and Positive Sales, Value Added, and Fixed Assets by Owner and Manufacturing Industry Group (million 1994 dong)
  13. page34
    Table 4: Mean Value Added-Fixed Asset Ratios in Firms with 20 or More Employees and PositiveSales, Value Added, and Fixed Assets by Owner and Manufacturing Industry Group
  14. page35
    Table 5: Coefficients Measuring SOE-Private and MNC-Private Productivity Differentials and the Productivity Effects of Concentration from Random Effects Production Function Estimates
  15. page37
    Table 6: Coefficients Measuring Productivity Spillovers and the Productivity Effects of Concentration on Private Firms from Fixed Effects Production Function Estimates
  16. page38
    Appendix Table A1: Details for Random Effects Estimates of Productivity Differentials and Productivity Effects of Concentration (excluding year, region and industry dummies, robust standard errors)
  17. page46
    Appendix Table A2: Details for Fixed Effects Estimates of the Effects of SOE Presence, MNC Presence, and Concentration on Local Firm Productivity (excluding year dummies, robust standard errors)
  18. page49
    Appendix Table B1a: Sales of All Firms, SOEs, and MNCs with 20 or More Employees and Positive Sales, Value Added and Fixed Assets by Industry Group (trillion dong)
  19. page50
    Appendix Table B1b: Sales of All Firms, SOEs, and MNCs with Positive Sales, Employment, Value Added, and Fixed Assets by Industry Group (trillion dong)
  20. page51
    Appendix Table B1c: Sales of All Firms, SOEs and MNCs with Positive Sales and Employment by Industry Group (trillion dong)
  21. page52
    Appendix Table B2a: Yearend Employment of All Firms, SOEs, and MNCs with 20 or More Employees and Positive Sales, Value Added and Fixed Assets by Industry Group (thousands)
  22. page53
    Appendix Table B2b: Yearend Employment of All Firms, SOEs, and MNCs with Positive Sales, Employment, Value Added, and Fixed Assets by Owner and Industry Group (thousands)
  23. page54
    Appendix Table B2c: Yearend Employment of All Firms, SOEs, and MNCs with Positive Sales and Employmentby Industry Group (thousands)
  24. page55
    Appendix Table B3a: Number of All Firms, SOEs, MNCs with 20 or More Employees and Positive Sales, ValueAdded, and Fixed Assets by Industry Group
  25. page56
    Appendix Table B3b: Number of All Firms, SOEs, and MNCs with Positive Sales, Employment, Value Added, and Fixed Assets by Industry Group
  26. page57
    Appendix Table B3c: Number of All Firms, SOEs, and MNCs with Positive Sales and Employment by Owner and Industry Group
  27. page58
    Appendix Table B4a: Value Added of All Firms, SOEs, and MNCs with 20 or More Employees and Positive Sales, Value Added and Fixed Assets by Owner and Industry Group (trillion dong)
  28. page59
    Appendix Table B4b: Value Added of All Firms, SOEs, and MNCs with Positive Sales, Employment, Value Added, and Fixed Assets by Owner and Industry Group (trillion dong)
  29. page60
    Appendix Table 5a: Yearend Fixed Assets of All Firms, SOEs, and MNCs with 20 or More Employees and Positive Sales, Value Added and Fixed Assets by Owner and Industry Group (trillion dong)
  30. page61
    Appendix Table 5b: Yearend Fixed Assets of All Firms, SOEs, and MNCs with Positive Sales, Employment, ValueAdded and Fixed Assets by Owner and Industry Group (trillion dong)
  31. page62
    Appendix Table 5c: Yearend Fixed Assets of All Firms, SOEs, and MNCs with Positive Sales and Employment by Owner and Industry Group (trillion dong)
  32. page63
    Appendix Table B6a: Four-Firm Concentration Ratios by 2- and 3-digit Vietnam StandardIndustrial Classification (VSIC), Revison 3 (percent)
  33. page64
    Appendix Table B6b: Herfindahl Indexes by 2- and 3-digit Vietnam Standard IndustrialClassification (VSIC), Revison 3 (percent)
  34. page65
    Appendix Table B6c: SOE shares of Yearend Employment by 2- and 3-digit Vietnam Standard Industrial Classification (VSIC), Revison 3 (percent)
  35. page66
    Appendix Table B6d: SOE shares of Sales by 2- and 3-digit Vietnam Standard IndustrialClassification (VSIC), Revison 3 (percent)/div>
  36. page67
    Appendix Table B6i: Definitons of 3-digit Categories in the Vietnam Standard IndustrialClassification (VSIC), Revison 3 (percent)
  37. page68
    Appendix Table B6j: Deflators for Manufacturing Output by 2-digit VSIC (1994 prices)
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