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Trade liberalization and firms’ productivity in Vietnam: the role of local business environment

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  • Quoc Thai Le
  • Chiara Tomasi

Abstract

This paper examines how frictions in the local business environment where firms operate alter the productivity gains from trade. Using Vietnamese firm-level data from 2006 to 2012, the analysis provides robust evidence of a positive effect of trade opening on firms’ efficiency. However, distortions that operate through certain local market features in the form of unenforceable property rights, an ineffective land-titling system, bureaucratic hurdles and labour market frictions play a crucial role in the transmission of trade liberalization shocks. These findings have important policy implications because they suggest that complementary policies addressing local market constraints need to be implemented alongside trade reforms.

Suggested Citation

  • Quoc Thai Le & Chiara Tomasi, 2023. "Trade liberalization and firms’ productivity in Vietnam: the role of local business environment," Regional Studies, Taylor & Francis Journals, vol. 57(9), pages 1681-1713, September.
    • Handle: RePEc:taf:regstd:v:57:y:2023:i:9:p:1681-1713
    DOI: 10.1080/00343404.2022.2155297
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    Cited by:

    1. Van Ha, Le, 2024. "Unveiling a novel approach to corruption measurement: Leveraging household survey data on income and expenditure through forensic analysis," Economic Modelling, Elsevier, vol. 136(C).

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