From central planning toward a market economy: The role of ownership and competition in Vietnamese firms’ productivity

Fabio Pieri, Le Manh-Duc () and Enrico Zaninotto ()

No 2018/01, DEM Working Papers from Department of Economics and Management

Abstract: This paper examines the role of ownership and market competition in Vietnamese firms’ total factor productivity (TFP) from 2001 to 2011. Making use of a large panel dataset of Vietnamese manufacturing firms, we find that, on average, both foreign-owned enterprises (FOEs) and state-owned enterprises (SOEs) have performed better than privately owned enterprises (POEs) in terms of their TFP levels. However, while FOEs ranked the highest in terms of TFP in the period 2001–2006, SOEs “closed the gap†with FOEs in the period 2007–2011. SOEs’ good performance may be the result of the state-led development policies undertaken during the 2000s. We also find that market competition has been effective in enhancing average firm productivity and reducing the gaps in efficiency across firms of different ownership types. Based on these results, we compare Vietnam’s transition path with those followed by other countries.

Keywords: Ownership; market competition; TFP; Vietnamese manufacturing; transition economies (search for similar items in EconPapers)
JEL-codes: D24 L33 N60 O53 P27 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-com, nep-eff, nep-sea, nep-tid and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:trn:utwprg:2018/01

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