Misallocation and Productivity: The Case of Vietnamese Manufacturing

Asian Development Review 33:2, 2016

25 Pages Posted: 16 Sep 2016

See all articles by Doan Thi Thanh Ha

Doan Thi Thanh Ha

Yokohama National University

Kozo Kiyota

Keio University - Keio Economic Observatory

Kenta Yamanouchi

Keio University

Date Written: September 12, 2016

Abstract

This paper attempts to measure the effect of resource misallocation on aggregate manufacturing total factor productivity, focusing on Vietnamese manufacturing firms during the period 2000–2009. One of the major findings of this paper is that there would have been substantial improvement in aggregate total factor productivity in Viet Nam in the absence of distortions. The results imply that potential productivity gains from removing distortions in Vietnamese manufacturing are large. We also find that smaller firms tend to face advantageous distortions, while larger firms tend to face disadvantageous ones. Moreover, the efficient size distribution is more dispersed than the actual size distribution. These results suggest that Viet Nam’s policies may constrain its largest and most efficient producers, and coddle its smallest and least efficient ones.

Keywords: misallocation, total factor productivity, Viet Nam

JEL Classification: D22, F14, O47

Suggested Citation

Ha, Doan Thi Thanh and Kiyota, Kozo and Yamanouchi, Kenta, Misallocation and Productivity: The Case of Vietnamese Manufacturing (September 12, 2016). Asian Development Review 33:2, 2016. Available at SSRN: https://ssrn.com/abstract=2837830

Doan Thi Thanh Ha

Yokohama National University

Tokiwadai, Hodogaya-Ku, Yokohama
Yokohama
Japan

Kozo Kiyota (Contact Author)

Keio University - Keio Economic Observatory ( email )

Mita 2-15-45, Minato-ku
Tokyo, 108-8345
Japan

Kenta Yamanouchi

Keio University ( email )

2-15-45 Mita
Minato-ku
Tokyo, 108-8345
Japan

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