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Misallocation and Productivity: The Case of Vietnamese Manufacturing

Ha Doan, Kozo Kiyota and Kenta Yamanouchi ()
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Kenta Yamanouchi: Graduate School of Economics, Keio University, Japan

Asian Development Review, 2016, vol. 33, issue 2, 94-118

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 (search for similar items in EconPapers)
JEL-codes: D22 F14 O47 (search for similar items in EconPapers)
Date: 2016
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