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Reallocation and imported technology: evidence from Vietnam manufacturing sector

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  • Nguyen Khac Minh
  • Phung Mai Lan

Abstract

The objective of this study is to measure the contribution of 'high-tech' importers (high-tech firms) to the productivity growth of the Vietnamese manufacturing industry. This analysis uses augmented Olley-Pakes' static and dynamic productivity decomposition and the annual panel industrial survey data from 2012-2016. The results indicate that high-tech firms account for only 20.8% of total firms but contribute 59.6% to productivity growth. The static decomposition shows that the reallocation process is an important mechanism for increasing the industrial productivity. The dynamic decomposition indicates that the exiting firms are the factor that reduces productivity growth while learning by doing and improving technology within the firm are limited and only significantly contribute in high-tech firms. The results also show that high-tech importers not only increase their productivity but also become stronger in the market. The spillover effect from the high-tech firms is stronger than that of foreign-owned firms.

Suggested Citation

  • Nguyen Khac Minh & Phung Mai Lan, 2024. "Reallocation and imported technology: evidence from Vietnam manufacturing sector," International Journal of Manufacturing Technology and Management, Inderscience Enterprises Ltd, vol. 38(2), pages 126-142.
    • Handle: RePEc:ids:ijmtma:v:38:y:2024:i:2:p:126-142
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