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Does firm privatisation benefit local households? The case of Vietnam

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  • Long Thanh Giang
  • Cuong Viet Nguyen
  • Huong Vu Van
  • Thieu Vu

Abstract

Although most countries follow a market economy, they still maintain a number of state-owned firms. In Vietnam the process of firm privatisation has been going on since the early 1990s. However, state-owned firms and joint-venture firms with public capital still account for nearly 40% of total firm output. In this article we find that the privatisation of firms can help households improve their welfare and reduce poverty, albeit by a small magnitude. The agglomeration of firms, as a result of privatisation, increases employment and wages of individuals and thus has a positive effect on per capita income, per capita expenditure and poverty reduction. In particular, the effect on per capita expenditure tends to be higher for households with male, younger and better educated heads than those with female, older and less well educated heads. We do not find any effect from state-owned firms on household welfare and poverty reduction.

Suggested Citation

  • Long Thanh Giang & Cuong Viet Nguyen & Huong Vu Van & Thieu Vu, 2015. "Does firm privatisation benefit local households? The case of Vietnam," Post-Communist Economies, Taylor & Francis Journals, vol. 27(4), pages 547-565, December.
    • Handle: RePEc:taf:pocoec:v:27:y:2015:i:4:p:547-565
    DOI: 10.1080/14631377.2015.1055988
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    References listed on IDEAS

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    1. Christopher J. Green & Colin Kirkpatrick & Victor Murinde (ed.), 2005. "Finance and Development," Books, Edward Elgar Publishing, number 2764.
    2. Shapiro, C. & Willing, D.R., 1990. "Economic Rationales For The Scope Of Privatization," Papers 41, Princeton, Woodrow Wilson School - Discussion Paper.
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    Cited by:

    1. Cuong Viet Nguyen & Quang Duy Phung, 2020. "Does Firm Agglomeration Induce Migration? Evidence from Vietnam," Economics Bulletin, AccessEcon, vol. 40(4), pages 3325-3337.

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