Technical efficiency in the Vietnamese manufacturing sector

Technical efficiency in the Vietnamese manufacturing sector Pham H.T., Dao T.L., Reilly B. Department of Economics, University of Sussex, BN1 9SN, United Kingdom; Department of International Economics, National Economics University, 207 Giai Phong Road, Hanoi, Viet Nam Abstract: The manufacturing sector has developed into the Vietnamese economy's most important sector on the basis of its contribution to export and GDP growth over the past decade. The doi moi reform process transformed Vietnam's manufacturing activity from a state-dominated sector to a vibrant one containing important roles for both newly created domestic and foreign-invested private firms. This paper employs a stochastic frontier estimation approach, in conjunction with data drawn from the Vietnam Enterprise Survey for 2003, to estimate and inform the determinants of technical efficiency in the manufacturing sector. The empirical results reveal that an average manufacturing enterprise is operating at nearly 62 per cent of its technically efficient frontier with an estimated standard deviation of around 16 per cent. The study provides empirical evidence of a positive relationship between technical efficiency, export orientation and several measures of trade openness. © 2009 John Wiley & Sons, Ltd. Author Keywords: Stochastic frontier; Technical efficiency; Vietnam Index Keywords: economic analysis; manufacturing; modeling; technical efficiency; Viet Nam Year: 2010 Source title: Journal of International Development Volume: 22 Issue: 4 Page : 503-520 Link: Scorpus Link Correspondence Address: Pham, H. T.; Department of International Economics, National Economics University, 207 Giai Phong Road, Hanoi, Viet Nam; email: hungpt@neu.edu.vn ISSN: 9541748 DOI: 10.1002/jid.1588 Language of Original Document: English Abbreviated Source Title: Journal of International Development Document Type: Article Source: Scopus Authors with affiliations: 1. Pham, H.T., Department of International Economics, National Economics University, 207 Giai Phong Road, Hanoi, Viet Nam 2. Dao, T.L., Department of Economics, University of Sussex, BN1 9SN, United Kingdom 3. Reilly, B., Department of Economics, University of Sussex, BN1 9SN, United Kingdom References: 1. Aigner, D.J., Chu, S.F., On estimating the industry production function (1968) American Economic Review, 58, pp. 826-839 2. Aigner, D.J., Lovell, C.A.K., Schmidt, P., Formulation and estimation of stochastic frontier production function models (1977) Journal of Econometrics, 6, pp. 21-37 3. 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