Technical efficiency in the Vietnamese manufacturing sector

Hung T. Pham, Thanh L. Dao and Barry Reilly
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Hung T. Pham: Department of International Economics, National Economics University, 207 Giai Phong Road, Hanoi, Vietnam, Postal: Department of International Economics, National Economics University, 207 Giai Phong Road, Hanoi, Vietnam
Thanh L. Dao: Department of Economics, University of Sussex, BN1 9SN, UK, Postal: Department of Economics, University of Sussex, BN1 9SN, UK

Journal of International Development, 2010, vol. 22, issue 4, 503-520

Abstract: The manufacturing sector has developed into the Vietnamese economy's most important sector on the basis of its contribution to export and GDP growth over the past decade. The doi moi reform process transformed Vietnam's manufacturing activity from a state-dominated sector to a vibrant one containing important roles for both newly created domestic and foreign-invested private firms. This paper employs a stochastic frontier estimation approach, in conjunction with data drawn from the Vietnam Enterprise Survey for 2003, to estimate and inform the determinants of technical efficiency in the manufacturing sector. The empirical results reveal that an average manufacturing enterprise is operating at nearly 62 per cent of its technically efficient frontier with an estimated standard deviation of around 16 per cent. The study provides empirical evidence of a positive relationship between technical efficiency, export orientation and several measures of trade openness. Copyright © 2009 John Wiley & Sons, Ltd.

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jintdv:v:22:y:2010:i:4:p:503-520

DOI: 10.1002/jid.1588

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