Premature deindustrialization risk in Vietnam Premature deindustrialization risk in Vietnam

Abstract

Purpose: This study aims to examine the premature deindustrialization risk in Vietnam. Design/methodology/approach: This study uses a manufacturing–income relationship to conduct an empirical estimation. The latecomer index is adopted in the regression model to identify a downward shift of latecomer's relationship. Findings: The empirical analysis indicates that there is a risk of premature deindustrialization in the Northern Midlands and Mountain Areas. The provinces with low trade openness or foreign direct investment may experience risk of premature deindustrialization. Practical implications: This study proposes technology diffusion as a policy direction to prevent premature deindustrialization. Furthermore, the Vietnamese government should improve the business environment in the Northern Midlands and Mountain Areas by promoting and attracting export-oriented foreign direct investment. Originality/value: This study is the first to examine premature deindustrialization in Vietnam based on provincial-level data.