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Technical efficiency in the Vietnamese manufacturing sector
Author(s) -
Pham Hung T.,
Dao Thanh L.,
Reilly Barry
Publication year - 2010
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.1588
Subject(s) - vietnamese , openness to experience , manufacturing sector , frontier , estimation , economics , manufacturing , private sector , business , industrial organization , international economics , economic growth , political science , psychology , social psychology , philosophy , linguistics , management , marketing , law
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.