EconPapers    
Economics at your fingertips  
 

Globalization and state capitalism: Assessing Vietnam's accession to the WTO

Leonardo Baccini, Giammario Impullitti and Edmund J. Malesky

Journal of International Economics, 2019, vol. 119, issue C, 75-92

Abstract: What do state-owned enterprises (SOEs) do? How do they respond to market incentives? Can we expect substantial efficiency gains from trade liberalization in economies with a strong presence of SOEs? Using a new dataset of Vietnamese firms we document a set of empirical regularities distinguishing SOEs from private firms. Then we empirically study the effect of the 2007 WTO accession on selection, competition, and productivity. Our results show that WTO entry is associated with higher probability of exit, lower firm profitability, and substantial increases in productivity for private firms but not for SOEs. Our estimates suggest that the overall productivity gains would have been about 40% larger in a counterfactual Vietnamese economy without SOEs. We highlight some economic mechanisms possibly driving these findings through the lenses of a model of trade with heterogeneous private and state-owned firms. The model suggests that political/regulatory barriers to entry and access to credit are key drivers of the different response of SOEs to trade liberalization. Further empirical tests broadly validate these insights.

Keywords: State-owned enterprises; State capitalism; Heterogeneous firms; Gains from trade; WTO; Vietnam (search for similar items in EconPapers)
JEL-codes: F12 F13 F14 P31 P33 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022199619300182
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Globalization and State Capitalism: Assessing Vietnam's Accession to the WTO (2019) Downloads
Working Paper: Globalization and State Capitalism: Assessing Vietnam's Accession to the WTO (2017) Downloads
Working Paper: Globalization and State Capitalism: Assessing Vietnam’s Accession to the WTO (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:119:y:2019:i:c:p:75-92

DOI: 10.1016/j.jinteco.2019.02.004

Access Statistics for this article

Journal of International Economics is currently edited by Gourinchas, Pierre-Olivier and Rodríguez-Clare, Andrés

More articles in Journal of International Economics from Elsevier
Bibliographic data for series maintained by Haili He ().

 
Page updated 2020-10-14
Handle: RePEc:eee:inecon:v:119:y:2019:i:c:p:75-92