Exporting and Productivity: The Role of Ownership and Innovation in the Case of Vietnam

UNU-WIDER Working Paper No. 04/2014; 2014(070)

Posted: 15 Dec 2014

See all articles by Finn Tarp

Finn Tarp

University of Copenhagen - Department of Economics

Carol Newman

Trinity College (Dublin)

John Rand

University of Copenhagen - Department of Economics

Date Written: April 2014

Abstract

In this paper, we investigate the relationship between exporting and productivity in the case of Vietnam using an extensive firm level panel dataset for the period 2005-11. We separate out productivity effects of exporting due to self-selection allowing us to identify the extent to which firms learn-by-exporting. We examine the relationship between exporting and productivity in foreign-owned firms and private domestic firms separately and find the former benefit more from exporting, particularly wholly foreign-owned firms. Our analysis suggests that these effects are likely to be attributed to initial productivity improvements due to entry into export markets suggesting that the productivity gains are associated with the removal of local market constraints. We also find some evidence of productivity improvement for domestic firms associated with exporting. These effects can be attributed to within-firm innovations in production processes and product quality.

Suggested Citation

Tarp, Finn and Newman, Carol and Rand, John, Exporting and Productivity: The Role of Ownership and Innovation in the Case of Vietnam (April 2014). UNU-WIDER Working Paper No. 04/2014; 2014(070), Available at SSRN: https://ssrn.com/abstract=2537855

Finn Tarp (Contact Author)

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark

Carol Newman

Trinity College (Dublin) ( email )

2-3 College Green
Dublin, Leinster D2
Ireland

John Rand

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark

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