IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v121y2009i1p274-285.html
   My bibliography  Save this article

Contribution of productivity and firm size to value-added: Evidence from Vietnam

Author

Listed:
  • Tran, Thi Bich
  • Grafton, Quentin
  • Kompas, Tom

Abstract

A new indexing method is developed to decompose the contributions of productivity, prices and firm size to a firm's value-added. The method introduces an error term into the decomposition equation to capture measurement biases which are caused by using the deflator instead of the observed price and all other sorts of measurement error. An application of the method is given using private small and medium manufacturing firm level data in Vietnam from 1996 and 2001. The error index decomposition method provides a comparison of performance of all firms to the hypothetical representative firm. The analysis allows firms and policy makers to realize the key factors contributing to the success or failure of a firm and suggest strategies to improve firm economic performance.

Suggested Citation

  • Tran, Thi Bich & Grafton, Quentin & Kompas, Tom, 2009. "Contribution of productivity and firm size to value-added: Evidence from Vietnam," International Journal of Production Economics, Elsevier, vol. 121(1), pages 274-285, September.
    • Handle: RePEc:eee:proeco:v:121:y:2009:i:1:p:274-285
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925-5273(09)00180-7
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Tim Coelli & Antonio Estache & Sergio Perelman & Lourdes Trujillo, 2003. "A Primer on Efficiency Measurement for Utilities and Transport Regulators," World Bank Publications - Books, The World Bank Group, number 15149.
    2. Allen, Robert C & Diewert, W Erwin, 1981. "Direct versus Implicit Superlative Index Number Formulae," The Review of Economics and Statistics, MIT Press, vol. 63(3), pages 430-435, August.
    3. Ramamurthy, Bhargavi, 1998. "The Private Manufacturing Sector in Vietnam: An Analysis of the Winners," SSE/EFI Working Paper Series in Economics and Finance 251, Stockholm School of Economics.
    4. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
    5. Gordon, Robert J & Griliches, Zvi, 1997. "Quality Change and New Products," American Economic Review, American Economic Association, vol. 87(2), pages 84-88, May.
    6. Robert J. Hill, 1997. "A Taxonomy Of Multilateral Methods For Making International Comparisons Of Prices And Quantities," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 43(1), pages 49-69, March.
    7. Diewart, W Erwin & Morrison, Catherine J, 1986. "Adjusting Output and Productivity Indexes for Changes in the Terms of Trade," Economic Journal, Royal Economic Society, vol. 96(383), pages 659-679, September.
    8. Kevin J. Fox & R. Quentin Grafton & Tom Kompas & Tuong Nhu Che, 2003. "Productivity and capacity reduction: the case of a fishery," International and Development Economics Working Papers idec03-2, International and Development Economics.
    9. Timothy F. Bresnahan & Robert J. Gordon, 1996. "Introduction to "The Economics of New Goods"," NBER Chapters, in: The Economics of New Goods, pages 1-26, National Bureau of Economic Research, Inc.
    10. Fox, Kevin J. & Grafton, R. Quentin & Kirkley, James & Squires, Dale, 2003. "Property rights in a fishery: regulatory change and firm performance," Journal of Environmental Economics and Management, Elsevier, vol. 46(1), pages 156-177, July.
    11. Timothy F. Bresnahan & Robert J. Gordon, 1996. "The Economics of New Goods," NBER Books, National Bureau of Economic Research, Inc, number bres96-1.
    12. Christensen, L. R. & Cummings, D. & Jorgenson, D. W., 1981. "Relative productivity levels, 1947-1973 : An international comparison," European Economic Review, Elsevier, vol. 16(1), pages 61-94.
    13. Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "Multilateral Comparisons of Output, Input, and Productivity Using Superlative Index Numbers," Economic Journal, Royal Economic Society, vol. 92(365), pages 73-86, March.
    14. Hemlin, Maud & Ramamurthy, Bhargavi & Ronnås, Per, 1998. "The Anatomy and Dynamics of Small Scale Private Manufacturing in Vietnam," SSE/EFI Working Paper Series in Economics and Finance 236, Stockholm School of Economics.
    15. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Christine Ngoc Ngo & Miao Chi, 2017. "Differentials in market constraints and value addition among micro, small, and medium enterprises in Vietnam," WIDER Working Paper Series 082, World Institute for Development Economic Research (UNU-WIDER).
    2. Christine Ngoc Ngo & Miao Chi, 2017. "Differentials in market constraints and value addition among micro, small, and medium enterprises in Vietnam," WIDER Working Paper Series wp-2017-82, World Institute for Development Economic Research (UNU-WIDER).
    3. Schiavone, Ansel, 2023. "Labor market concentration and labor share dynamics for US regional industries," Economic Modelling, Elsevier, vol. 125(C).
    4. Yu Ri Kim & Taewoo Roh, 2024. "How Does Government Information Access Interplay with Resources of Emerging Market Small and Medium-Sized Enterprises for Innovation? Evidence from Vietnam," Sustainability, MDPI, vol. 16(13), pages 1-19, July.
    5. Hwang, Won-Sik & Lee, Jeong-Dong, 2013. "Profitability and productivity changes in the Korean electricity industry," Energy Policy, Elsevier, vol. 52(C), pages 531-542.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fox, Kevin J. & Grafton, R. Quentin & Kirkley, James & Squires, Dale, 2003. "Property rights in a fishery: regulatory change and firm performance," Journal of Environmental Economics and Management, Elsevier, vol. 46(1), pages 156-177, July.
    2. Jan Kluge & Sarah Lappöhn & Kerstin Plank, 2023. "Predictors of TFP growth in European countries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 50(1), pages 109-140, February.
    3. Thi Bich Tran & R. Quentin Grafton & Tom Kompas, 2008. "Firm Efficiency in a Transitional Economy: Evidence from Vietnam," Asian Economic Journal, East Asian Economic Association, vol. 22(1), pages 47-66, March.
    4. Barnett, William A. & Erwin Diewert, W. & Zellner, Arnold, 2011. "Introduction to measurement with theory," Journal of Econometrics, Elsevier, vol. 161(1), pages 1-5, March.
    5. Kevin J. Fox & R. Quentin Grafton & Tom Kompas & Tuong Nhu Che, 2003. "Productivity and capacity reduction: the case of a fishery," International and Development Economics Working Papers idec03-2, International and Development Economics.
    6. Mehdi Farsi & Aurelio Fetz & Massimo Filippini, 2007. "Benchmarking and Regulation in the Electricity Distribution Sector," CEPE Working paper series 07-54, CEPE Center for Energy Policy and Economics, ETH Zurich.
    7. Luc Baumstark & Claude Ménard & William Roy & Anne Yvrande-Billon, 2005. "Modes de gestion et efficience des opérateurs dans le secteur des transports urbains de personnes," Post-Print halshs-00103116, HAL.
    8. Karim L. Anaya & Michael G. Pollitt, 2014. "Does Weather Have an Impact on Electricity Distribution Efficiency? Evidence from South America," Working Papers EPRG 1404, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    9. Van Ha, Nguyen & Kant, Shashi & Maclaren, Virginia, 2008. "Shadow prices of environmental outputs and production efficiency of household-level paper recycling units in Vietnam," Ecological Economics, Elsevier, vol. 65(1), pages 98-110, March.
    10. Andor, Mark A. & Parmeter, Christopher & Sommer, Stephan, 2019. "Combining uncertainty with uncertainty to get certainty? Efficiency analysis for regulation purposes," European Journal of Operational Research, Elsevier, vol. 274(1), pages 240-252.
    11. Tovar, Beatriz & Javier Ramos-Real, Francisco & de Almeida, Edmar Fagundes, 2011. "Firm size and productivity. Evidence from the electricity distribution industry in Brazil," Energy Policy, Elsevier, vol. 39(2), pages 826-833, February.
    12. Mehdi Farsi & Massimo Filippini, 2005. "A Benchmarking Analysis of Electricity Distribution Utilities in Switzerland," CEPE Working paper series 05-43, CEPE Center for Energy Policy and Economics, ETH Zurich.
    13. Y. Wu, 1997. "Productivity & Efficiency: Evidence from the Chinese regional economies," Economics Discussion / Working Papers 97-18, The University of Western Australia, Department of Economics.
    14. Massimo Del Gatto & Adriana Di Liberto & Carmelo Petraglia, 2011. "Measuring Productivity," Journal of Economic Surveys, Wiley Blackwell, vol. 25(5), pages 952-1008, December.
    15. Fatima Lambarraa & Spiro Stefanou & Teresa Serra & José M. Gil, 2009. "The impact of the 1999 CAP reforms on the efficiency of the COP sector in Spain," Agricultural Economics, International Association of Agricultural Economists, vol. 40(3), pages 355-364, May.
    16. Wu, Yanrui, 2000. "Is China's economic growth sustainable? A productivity analysis," China Economic Review, Elsevier, vol. 11(3), pages 278-296.
    17. Mehdi Farsi & Massimo Filippini & William Greene, 2006. "Application Of Panel Data Models In Benchmarking Analysis Of The Electricity Distribution Sector," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 77(3), pages 271-290, September.
    18. Kevin J. Fox & R. Quentin Grafton & Tom Kompas & Tuong Nhu Che, 2003. "Capacity Reduction and Productivity: The Case of Fishery," Economics and Environment Network Working Papers 0303, Australian National University, Economics and Environment Network.
    19. Suárez-Alemán, Ancor & Morales Sarriera, Javier & Serebrisky, Tomás & Trujillo, Lourdes, 2016. "When it comes to container port efficiency, are all developing regions equal?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 86(C), pages 56-77.
    20. Wenche Tobiasson & Manuel Llorca & Tooraj Jamasb, 2021. "Performance Effects of Network Structure and Ownership: The Norwegian Electricity Distribution Sector," Energies, MDPI, vol. 14(21), pages 1-15, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:121:y:2009:i:1:p:274-285. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.