[STBI-21-12-2016] Productivity Convergence in Vietnamese Manufacturing Industry: Evidence using a Spatial Durbin Model

by Professor Michel Simioni 

11:00 am, Monday, 21-12-2015
Hall H.001, UEH School of Economics

Abstract

This paper applies the β-convergence regression model in order to assess convergence of total factor productivity among Vietnamese provinces for manu- facturing industries. Specifically, we express this model in the form of a Spatial Durbin Model (SDM), which allows us to take into account the presence of omitted variables that can be spatially correlated and correlated with the initial level of pro- ductivity. We calculate the annual total factor productivity (TFP) of 63 Vietnamese provinces and 6 manufacturing industries, using the results of the structural estima- tion of a value-added production function from firm data over the period from 2000 to 2012. The regression of growth rates of TFP over this period on the initial levels of productivity using SDM shows that there is convergence in most industries, i.e. the gap between lower-productivity and higher-productivity provinces decreases. These results also show the importance of modeling the indirect effect of the initial level of productivity of a province on its TFP growth rate, through its effect on neighbor- ing provinces. The inclusion of these indirect effects is made possible by SDM and increases the speed of convergence for most considered manufacturing industries, except for metal and machinery, and transportation and telecommunication.

Presenter

Professor Michel Simioni is currently senior researcher at Toulouse School of Economics, France. His research areas widely consist of production econometrics, productivity and efficiency measurement, empirical industrial organization and the food processing industry, and non and semi parametrics. Simioni has published a number of studies in academic journals such Ecological Indicators, Applied Economics, Canadian Journal of Agricultural Economics, European Review of Agricultural Economics, Journal of Applied Econometrics, Review of Development Economics, European Review of Agricultural Economics, American Journal of Agricultural Economics, Journal of Nonparametric Statistics, Journal of Productivity Analysis, Computational Statistics, and others.

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