This paper examines how frictions in the local business environment where firms operate alter the productivity gains from trade. Using Vietnamese firm-level data from 2006 to 2012, the analysis provides robust evidence of a positive effect of trade opening on firms’ efficiency. However, distortions that operate through certain local market features in the form of unenforceable property rights, an ineffective land-titling system, bureaucratic hurdles and labour market frictions play a crucial role in the transmission of trade liberalization shocks. These findings have important policy implications because they suggest that complementary policies addressing local market constraints need to be implemented alongside trade reforms.
Trade liberalization and firms' productivity in Vietnam: the role of local business environment / Le, Quoc Thai; Tomasi, Chiara. - In: REGIONAL STUDIES. - ISSN 0034-3404. - ELETTRONICO. - 2023, 57:9(2023), pp. 1681-1713. [10.1080/00343404.2022.2155297]
Trade liberalization and firms' productivity in Vietnam: the role of local business environment
Le, Quoc ThaiPrimo
;Tomasi, Chiara
Ultimo
2023-01-01
Abstract
This paper examines how frictions in the local business environment where firms operate alter the productivity gains from trade. Using Vietnamese firm-level data from 2006 to 2012, the analysis provides robust evidence of a positive effect of trade opening on firms’ efficiency. However, distortions that operate through certain local market features in the form of unenforceable property rights, an ineffective land-titling system, bureaucratic hurdles and labour market frictions play a crucial role in the transmission of trade liberalization shocks. These findings have important policy implications because they suggest that complementary policies addressing local market constraints need to be implemented alongside trade reforms.File | Dimensione | Formato | |
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