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Open Access
Article
Publication date: 7 November 2019

Nguyen Khac Minh, Phung Mai Lan and Pham Van Khanh

The purpose of this paper is to measure TFP growth and job reallocation in the Vietnamese manufacturing industry after the Doimoi period.

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Abstract

Purpose

The purpose of this paper is to measure TFP growth and job reallocation in the Vietnamese manufacturing industry after the Doimoi period.

Design/methodology/approach

The study uses firm-level panel data from Vietnam’s annual enterprise survey data for 2000–2016 period in the Vietnamese manufacturing industry using Olley–Pakes static and dynamic productivity decomposition methods.

Findings

The aggregate productivity estimated from the WRDG method increased 2.323 percent, of which over 40 percent is due to the reallocation toward more productive firms. Olley–Pakes dynamic decomposition according to ownership, scale and industry shows that the contribution of private and state-owned firms and the contribution of small and medium firms and large firms to the TFP growth are 133, −33 percent, 58.56 and 41.44 percent, respectively. The within-firm productivity and net entry components are the main reasons for TFP growth rather than reallocation. The results show that the composition of the aggregate TFPs, estimated from WRDG, OP, LP and ACF, is correlated very high (over 80 percent) except for net entry components.

Research limitations/implications

The major limitation of this study is that the authors compute an aggregate productivity index using actual employment-based shares (still misallocation in labor), rather than optimal employment-based shares (no misallocation in labor).

Originality/value

Job reallocation between industries is attracting attention in developing countries, especially transition economies. However, knowledge about job reallocation among industries is limited. This paper assesses the level of job reallocation among private and state-owned firms, small and medium firms and large firms in Vietnam.

Details

Journal of Economics and Development, vol. 21 no. 2
Type: Research Article
ISSN: 2632-5330

Keywords

Article
Publication date: 2 August 2011

Sanja Samirana Pattnayak and Shandre M. Thangavelu

This paper aims to examine production linkage and technology spillovers due to the presence of foreign firms in the Indian pharmaceutical industry.

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Abstract

Purpose

This paper aims to examine production linkage and technology spillovers due to the presence of foreign firms in the Indian pharmaceutical industry.

Design/methodology/approach

This study employs the semi‐parametric estimation method suggested by Olley and Pakes to control for unobserved firm heterogeneity that accounts for the endogeneity of input selection with respect to productivity.

Findings

The results suggest that R&D activities of foreign firms lead to positive technology spillover to local firms. However, we also found negative linkage from the activities of foreign firms. The negative linkage could be explained by the large reverse engineering activities that occur on existing drugs in the Indian pharmaceutical industry, where the enclave activities of foreign firms might be a preemptive strategy to reduce the flow of technologies to downstream local firms and to protect their firm‐specific (product) technology.

Originality/value

The results provide support for strong institutional arrangements such as giving protection for Intellectual Property Rights, which might be important for attracting and creating linkages with activities of foreign firms in the host country.

Details

Journal of Economic Studies, vol. 38 no. 3
Type: Research Article
ISSN: 0144-3585

Keywords

Book part
Publication date: 11 May 2017

Müge Adalet McGowan and Dan Andrews

This paper explores the link between skill and qualification mismatch and labor productivity using cross-country industry data for 19 OECD countries. Utilizing mismatch…

Abstract

This paper explores the link between skill and qualification mismatch and labor productivity using cross-country industry data for 19 OECD countries. Utilizing mismatch indicators aggregated from micro-data sourced from the recent OECD Survey of Adult Skills (PIAAC), the main results suggest that higher skill and qualification mismatch is associated with lower labor productivity, with over-skilling and under-qualification accounting for most of these impacts. A novel result is that higher skill mismatch is associated with lower labor productivity through a less efficient allocation of resources, presumably because when the share of over-skilled workers is higher, more productive firms find it more difficult to attract skilled labor and gain market shares at the expense of less productive firms. At the same time, a higher share of under-qualified workers is associated with both lower allocative efficiency and within-firm productivity – that is, a lower ratio of high productivity to low productivity firms. While differences in managerial quality can potentially account for the relationship between mismatch and within-firm productivity, the paper offers some preliminary insights into the policy factors that might explain the link between skill mismatch and resource allocation.

Book part
Publication date: 3 June 2021

Hakan Kalkavan, Serhat Yüksel and Hasan Dinçer

The aim of this chapter is to determine the relationship between labor productivity and economic development. In this context, the annual data of Turkey on a range of…

Abstract

The aim of this chapter is to determine the relationship between labor productivity and economic development. In this context, the annual data of Turkey on a range of 1970–2017 are included in the study period. On the other hand, these data are tested with the help of Toda Yamamoto causality analysis. Thus, it will be possible to determine whether there is a strong relationship between the two variables. According to the obtained results of the analysis, it is defined that there is a causal relationship from labor productivity to economic growth in Turkey. Based on these results, it can be said that labor productivity should rise in order to increase economic development in Turkey. For this purpose, educational programs in Turkey can be revised with the help of a detailed study. In this process, cooperation with companies to understand the needs in the market plays a key role. Additionally, regulations should also be prepared related to the salaries of the employees. If it can be possible to prevent employees from receiving wages below a certain amount by placing a minimum legal limit on salaries, it will be possible to increase the motivation of the employees. This situation has a positive and significant contribution to the labor productivity.

Details

Productivity Growth in the Manufacturing Sector
Type: Book
ISBN: 978-1-80071-094-8

Keywords

Content available
Book part
Publication date: 3 June 2021

Abstract

Details

Productivity Growth in the Manufacturing Sector
Type: Book
ISBN: 978-1-80071-094-8

Article
Publication date: 1 September 2022

Pham Thi Bich Ngoc, Huynh Quoc Vu and Pham Dinh Long

This paper aims to examine spillover effects of heterogenous foreign direct investment (FDI) enterprises (domestic vs. export-oriented) through horizontal and vertical…

Abstract

Purpose

This paper aims to examine spillover effects of heterogenous foreign direct investment (FDI) enterprises (domestic vs. export-oriented) through horizontal and vertical linkages and absorptive capacity effect on domestic firms' total factor productivity (TFP). It clarifies the spillover effect on domestic firms in accordance with industrial zones, business size, technology sector and geographical agglomeration, respectively.

Design/methodology/approach

The dataset used is based on Vietnamese manufacturing firms during 2011–2014, input–output (I–O) Table 2012. This paper is conducted in two steps: (1) TFP is estimated by using a semi-parametric approach developed by Levinsohn and Petrin (2003); (2) Regression with panel data for domestic firms, applying the fixed effect method.

Findings

In terms of domestic-oriented FDI (DFDI) enterprise group: TFP spillover through horizontal linkages is found negative for domestic firms but positive for those participating in export. Additionally, backward linkages have a negative impact on TFP for most domestic enterprises, except for those operating in the high-tech sector. In terms of export-oriented FDI (EFDI) enterprise group, horizontal linkages have a negative impact on domestic firms' TFP including domestic ones participating in export whereas backward linkage is an important channel with positive effects. Absorptive capacity enables firms to improve productivity through linkages with EFDI and DFDI enterprises. Exporters located in industrial zones or regions with numerous exporters can receive better impacts through backward linkages EFDI.

Originality/value

Comprehensively, this is the first paper to detect FDI heterogeneity in their behavior when entering a developing country like Vietnam. The added value in this study comes from the export ability of local firms which is in line with Melitz (2003) theory that they can excel in absorping the TFP spillover from competing with DFDI competitors or from supplying to EFDI enterprises. Moreover, the role of small and medium-sized enterprises (SMEs), low technology, high technology and learning by regions affecting the impact through both horizontal and vertical linkages are included for analysis.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

Book part
Publication date: 1 November 2008

Arun Upadhyay

Board size has received significant attention among researchers and regulators. However, the advisory role of boards has not been studied much. In this study I examine the…

Abstract

Board size has received significant attention among researchers and regulators. However, the advisory role of boards has not been studied much. In this study I examine the notion that investors value larger boards for their advisory capabilities. Prior studies examine board size in the context of monitoring role of corporate boards and find opposite effects on debt holders and equity holders. Using market-based measures of total firm performance, which take both equity and debt into account; I find that larger boards are associated with greater economic value added (EVA). Using a sample of S&P 1500 firms from 2000 to 2003 and controlling for various firm and industry characteristics, I also find that the board size is positively associated with firm productivity and various other efficiency measures such as return on assets (ROA), return on equity (ROE) and Sales-Turnover ratio. I argue that firms with larger boards, valuing the advisory role of directors offer greater compensation to the directors. Overall the results indicate that large board size has a positive impact on firm's performance. The results are robust to alternative measures of firm performance and other key variables.

Details

Institutional Approach to Global Corporate Governance: Business Systems and Beyond
Type: Book
ISBN: 978-1-84855-320-0

Article
Publication date: 3 March 2022

Yot Amornkitvikai, Charles Harvie and Piyapong Sangkaew

The objectives of this study are to investigate the role of wages, skills development and R&D on the productivity of Thai manufacturing firms, using data from the 2017…

Abstract

Purpose

The objectives of this study are to investigate the role of wages, skills development and R&D on the productivity of Thai manufacturing firms, using data from the 2017 Industrial Census of Thailand.

Design/methodology/approach

The paper uses two-stage least squares (2SLS) to examine the role of wages, skills development and R&D, as well as other vital factors, impacting productivity as measured by labour productivity and total factor productivity.

Findings

Thai manufacturing firms' technology in aggregate exhibits decreasing returns to scale. Increasing wages and skills development promote the labour productivity and total factor productivity (TFP) of Thai manufacturers. R&D is also shown to be vital in promoting the labour productivity and TFP of large firms, but not small firms. Foreign direct investment (FDI) and government support can significantly increase large and medium-sized firms' labour productivity and TFP. Financially constrained firms tend to perform more productively. However, older firms, larger firms, labour supply shortages and political instability adversely affect labour productivity and TFP.

Practical implications

Upskilling and improving HRD policies could move Thailand towards a knowledge-based and high-income country in the future. Intellectual property protection should be strengthened to boost the country's R&D. The government should consider lifting restrictions on FDI to encourage international openness. The Thai Board of Investment’s promotion should target Thai manufacturing firms and FDI.

Originality/value

This study is the first to examine in detail the role of wages, skills development and R&D on the productivity of Thai firms based on the 2017 Thailand Industrial Census.

Details

Journal of Economic Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0144-3585

Keywords

Open Access
Article
Publication date: 26 August 2021

Segundo Camino-Mogro

Using a large firm-level data set, this paper examines total factor productivity (TFP) and its determinants in the Ecuadorian manufacturing sector in the period 2007–2018.

Abstract

Purpose

Using a large firm-level data set, this paper examines total factor productivity (TFP) and its determinants in the Ecuadorian manufacturing sector in the period 2007–2018.

Design/methodology/approach

I analyze the role played by traditional TPF determinants, including internal firm characteristics, international trade activities, financial constraints and competition intensity. I contribute to the literature by presenting quantile regression results. Moreover, I analyze industry patterns, distinguishing between industries according to their technological intensity (following the organisation for economic co-operation and development classification).

Findings

My results confirm that firm age is positively related to TFP level but negatively related to TFP growth. I also find that being an exporter and an importer at the same time is associated with higher TFP levels and that this effect is higher than when being only an exporter or an importer. Additionally, l find that credit is positively related to TFP levels. Finally, I find that more competition is positively related to productivity in lower quantiles of output.

Practical implications

The results are the source of tools to propose policy recommendations, which are stated in the present document.

Originality/value

This paper aims to reopen the debate of firm productivity determinants in a developing country such as Ecuador. The authors use a set of covariates less analyzed in this issue.

Details

Applied Economic Analysis, vol. 30 no. 89
Type: Research Article
ISSN:

Keywords

Article
Publication date: 20 May 2021

Xiangyuan Meng, Xue Li, Wenyan Xiao and Jie Li

The authors provide firm-level evidence that external financing affects international trade in a way different from internal financing.

Abstract

Purpose

The authors provide firm-level evidence that external financing affects international trade in a way different from internal financing.

Design/methodology/approach

The authors separate new entrants from incumbent exporters and investigate the roles of external and internal financing in export market participation and export quantity.

Findings

The authors find that external financing is of particular importance, as well as internal financing, in helping a firm become a new exporter. By contrast, external financing, unlike internal financing, is not significantly important for an incumbent exporter to stay in the international market. Regarding export quantity, a firm's internal financing is positively associated with more export quantity, whereas external financing is not.

Originality/value

The authors’ findings are consistent with the existence of significant fixed cost for entering the export market and external financing is particularly needed to cover such cost. Meanwhile, the financial need for maintaining the export status is much less and can be satisfied via internal financing.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

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