Institutions Matter: The Case of Vietnam

Thi Bich Tran, R. Quentin Grafton and Tom Kompas
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Thi Bich Tran: Crawford School of Economics and Government

Development Economics Working Papers from East Asian Bureau of Economic Research

Abstract: The paper investigates institutional reforms in Vietnam and their impact on the economic performance of firms. Using the provincial competitiveness index 2006 (PCI06) and firm-level data in Vietnam in 2005, the results show that provincial competitiveness is economically and statistically significant in explaining cross-province differences in firm performance. We find that a one percentage point improvement in government practice could increase the daily value-added of an average firm by an amount equivalent to nearly three times per capita GDP per day. The results show that an improvement in providing market information, more secure land tenure and labor training assistance has a positive effect on firm performance. By contrast, weaknesses in the judiciary system and administrative reforms impede growth of non-state firms. The findings indicate that governance is an important obstacle to the development of the non-state sector in Vietnam.

Keywords: Institution; Transition; property rights; non-state firm (search for similar items in EconPapers)
JEL-codes: B25 B52 D02 D23 N01 P26 (search for similar items in EconPapers)
Date: 2008-01
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Institutions matter: The case of Vietnam (2009)
Working Paper: Institutions matter: the case of Vietnam (2008)
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