Productivity growth, technological progress and efficiencychanges in Vietnamese high-tech industries

Abstract

Recently, Vietnamese high-tech industries have been receiving attention from both the government, foreign companies, as well as the private sector due to the notable figures of export values (Ministry of Trade and Industry [MoIT] & United Nations Industrial Development Organization [UNIDO], 2011). This thesis attempts to estimate the productivity growth of Vietnamese high-tech manufacturers and its sources of growth. Stochastic Production Frontier (SPF) approach is applied to the 2000-2012 panel dataset of Vietnamese high-tech manufactures, which are divided in 5 sub-industries. Total Factor Productivity (TFP) is then measured and decomposed to three sources, namely Technological progress (TP), Technical efficiency changes (TEC), and Scale change effects (SCE). Three different technical inefficiency effects models are also applied to investigate the determinants of technical efficiency. The empirical results show considerable controversy in both signs and magnitudes of TFP and its components, TE and its determinants across models. However, in general, maximum likelihood estimates show that TFP is not the main source of output increase. Furthermore, the productivity and efficiency of Vietnamese high-tech manufacturers are unlikely to change largely over time. Nevertheless, there are differences of technical inefficiency effects across regions, sub-industries, firm sizes, and type of ownerships