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State-owned enterprise reform in Vietnam: A dynamic CGE analysis

Author

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  • Minor, Peter
  • Walmsley, Terrie
  • Strutt, Anna

Abstract

In this paper, we consider the potential impact of State-Owned Enterprise (SOE) reform in Vietnam. We model a baseline for the Vietnamese economy to the year 2035, and then consider how a limited reform of SOEs might affect the structure of output, trade and employment. The SOE reform modeled assumes a gradual and partial approach: SOEs that are considered strategic are excluded from reform, while SOEs that are profitable and perform better than their non-SOE counterparts are assumed to stay in state hands. Of the remaining SOEs, we assume only 50 percent are reformed over a five-year period from 2016. Our results suggest that even this limited SOE reform could increase cumulative baseline real GDP by nearly nine percent for Vietnam in 2035. Wages for all occupation groups are found to increase and investment in Vietnam is projected to rise by up to 16 percent, relative to the baseline.

Suggested Citation

  • Minor, Peter & Walmsley, Terrie & Strutt, Anna, 2018. "State-owned enterprise reform in Vietnam: A dynamic CGE analysis," Journal of Asian Economics, Elsevier, vol. 55(C), pages 42-57.
    • Handle: RePEc:eee:asieco:v:55:y:2018:i:c:p:42-57
    DOI: 10.1016/j.asieco.2017.09.002
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    References listed on IDEAS

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    1. Ramstetter, Eric D., 2017. "How important are SOEs and MNEs in Vietnam’s economy?," AGI Working Paper Series 2017-09, Asian Growth Research Institute.
    2. Kym Anderson & Anna Strutt, 2014. "Emerging economies, productivity growth and trade with resource-rich economies by 2030," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(4), pages 590-606, October.
    3. Ramstetter, Eric D. & Ngoc, Phan Minh, 2013. "Productivity, ownership, and producer concentration in transition: Further evidence from Vietnamese manufacturing," Journal of Asian Economics, Elsevier, vol. 25(C), pages 28-42.
    4. Ianchovichina, Elena & McDougall, Robert, 2000. "Theoretical Structure Of Dynamic Gtap," Technical Papers 28723, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Cai, Lixin & Liu, Amy Y.C., 2015. "Wage determination and distribution in urban China and Vietnam: A comparative analysis," Journal of Comparative Economics, Elsevier, vol. 43(1), pages 186-203.
    6. Ianchovichina,Elena & Walmsley,Terrie L. (ed.), 2012. "Dynamic Modeling and Applications for Global Economic Analysis," Cambridge Books, Cambridge University Press, number 9781107002432, January.
    7. Phan Minh Ngoc & Eric D. Ramstetter, 2004. "Foreign Multinationals and Local Firms in Vietnam's Economic Transition," Asian Economic Journal, East Asian Economic Association, vol. 18(4), pages 371-404, December.
    8. Chih-Hai Yang & Eric D. Ramstetter & Jen-Ruey Tsaur & Minh Ngoc Phan, 2015. "Openness, Ownership, and Regional Economic Growth in Vietnam," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 51(S1), pages 224-233, January.
    9. Vu-Thanh, Tu-Anh, 2017. "Does WTO Accession Help Domestic Reform? The Political Economy of SOE Reform Backsliding in Vietnam," World Trade Review, Cambridge University Press, vol. 16(1), pages 85-109, January.
    10. Ianchovichina,Elena & Walmsley,Terrie L. (ed.), 2012. "Dynamic Modeling and Applications for Global Economic Analysis," Cambridge Books, Cambridge University Press, number 9781107011694, January.
    11. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, December.
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    Cited by:

    1. Keshab Bhattarai & Dung Thi Kim Nguyen & Chan Van Nguyen, 2019. "Impacts of Direct and Indirect Tax Reforms in Vietnam: A CGE Analysis," Economies, MDPI, vol. 7(2), pages 1-36, May.
    2. Jia, Zhijie & Wen, Shiyan & Lin, Boqiang, 2024. "Would behaviors of state-owned enterprises impact the performance of downstream industries in China?," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 1007-1035.
    3. My Duong & Mark J. Holmes & Anna Strutt & Steven Lim, 2019. "Effects of Trade Agreements and Foreign Direct Investment on Trade: Evidence from Vietnam," International Journal of Economics and Financial Issues, Econjournals, vol. 9(3), pages 116-126.
    4. Yanfei Bai & Dongxue Zhai & Xuefeng Zhao & Delin Wu, 2023. "The Impact of Property Rights Structure on High-Quality Development of Enterprises Based on Integrated Machine Learning—A Case Study of State-Owned Enterprises in China," Sustainability, MDPI, vol. 15(4), pages 1-23, February.

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    More about this item

    Keywords

    State owned enterprises; CGE modeling; Vietnam;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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