Volume 29, Issue 3
DOI: 10.24205/03276716.2020.764
Investment Climate and Firm Technical Efficiency in Vietnamese Manufacturing
Abstract
This paper identifies the constraints of the investment climate on Vietnamese manufacturing technical efficiency. The empirical results show that a good quality of infrastructure and finance, an investment-friendly and transparent environment, a safe society encourage firm technical efficiency. The impacts of the investment climate on firm technical efficiency are robust to various kinds of specifications. The results highlight that foreign firms attain improvements in production efficiency over time compared to domestic firms. Also, large firms as well as foreign firms get benefits from their exports in terms of technical efficiency. However, no strong evidence supports technical efficiency improvement in Vietnamese manufacturing firms after this country became an official WTO member in early 2007.
Keywords
Vietnamese manufacturing firms; Firm-level technical efficiency; Investment climate; Time-varying inefficiency model.