Productivity growth and job reallocation: Evidence from the garment industry in Vietnam

Thanh Tam Nguyen-Huu, Minh Nguyen-Khac () and Mai-Lan Phung ()
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Minh Nguyen-Khac: TIMAS, Thang-Long University, Hanoi, Vietnam
Mai-Lan Phung: Faculty of Economics and Management, Thuyloi University, Hanoi, Vietnam

Region et Developpement, 2020, vol. 52, 5-19

Abstract: The paper investigates the aggregate productivity decomposition in the garment indus-try of Vietnam between 2000 and 2016. According to the Olley-Pack decomposition, there is an improvement in aggregate productivity because garment firms become more productive and there is some job reallocation from less to more productive firms. Mean-while, the dynamic decomposition indicates that aggregate productivity growth is mainly driven by the dynamic entry-exit flow of firms. When firm ownership is considered, the productivity growth of private firms is principally conducted by their dynamic entry-exit flow, and to a lesser extent, by the productivity improvement of survivor firms. Differ-ently, the dynamic entry-exit flow is the sole factor leading to the productivity growth of state-own-enterprises and foreign firms.

Keywords: Productivity decomposition; Job reallocation; Productivity improvement; Entry-exit flow; Vietnam (search for similar items in EconPapers)
JEL-codes: D24 O10 (search for similar items in EconPapers)
Date: 2020
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