Productivity-Enhancing Manufacturing Clusters: Evidence from Vietnam

UNU-WIDER Working Paper No. 04/2014; 2014(071)

Posted: 15 Dec 2014

See all articles by Finn Tarp

Finn Tarp

University of Copenhagen - Department of Economics

Carol Newman

Trinity College (Dublin)

John Rand

University of Copenhagen - Department of Economics

Date Written: April 2014

Abstract

In this paper we explore the extent to which firms experience productivity spillovers from clustering using a rich data source from Vietnam for 2002 to 2007, a period of significant transition. We address issues of simultaneity, self-selection and endogenous location choice of firms in an estimation of firm level productivity. Controlling for competition effects and distinguishing between urbanization and localization economies, we find strong evidence for productivity spillovers from clustering. The effects of these spillovers are found to be particularly large for foreign-owned firms. Our results provide support for spatial clustering policies in developing countries aimed at attracting foreign investment.

Suggested Citation

Tarp, Finn and Newman, Carol and Rand, John, Productivity-Enhancing Manufacturing Clusters: Evidence from Vietnam (April 2014). UNU-WIDER Working Paper No. 04/2014; 2014(071), Available at SSRN: https://ssrn.com/abstract=2537857

Finn Tarp (Contact Author)

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark

Carol Newman

Trinity College (Dublin) ( email )

2-3 College Green
Dublin, Leinster D2
Ireland

John Rand

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
522
PlumX Metrics