The Uneven Impact of Industrial Zones on Formal Job Creation in Vietnam

Brian McCaig, Margaret McMillan, Marina Mavungu Ngoma and Anh T. Pham

No 35446, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Industrial zones are a widely used industrial policy tool, yet their effects vary enormously. Matching the timing and location of zone establishment to firm-level data in Vietnam, we estimate that a new zone raises formal employment by 2,000 workers within seven years. This average masks extreme skewness: a handful of zones generate the gains while the rest produce almost none. Zones near major trade hubs account for most of the effect, driven by export-oriented foreign manufacturers. Accounting for spillovers, domestic firms face agglomeration shadows nearby but gain farther out, while foreign manufacturers operate as enclaves, generating few local linkages.

JEL-codes: L52 O25 O53 R11 (search for similar items in EconPapers)
Date: 2026-07
Note: DEV ITI
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