Technical efficiency of FDI firms in the Vietnamese manufacturing sector

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Abstract

The study examines technical efficiency of Foreign Direct Investment (FDI) firms in the Vietnamese manufacturing sector by applying stochastic production frontier model and making use of cross-sectional data in the period 2009-2013. The average level of technical efficiency of FDI firms is about 60% and it is higher than that of domestic firms (including private firms and state-owned firms). In addition, the study also analyses correlation between technical efficiency of FDI firms and other factors. It finds that there are positive correlations between FDI technical efficiency and net revenue per labour, firm’s age or export activities in 2013. However, the study is unable to find evidence of a relationship between FDI technical efficiency and infrastructure or firm’s investment activities.

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Legislation Decision no. 879.QD - TTg dated 9th June, 2014 on approving the strategy on Vietnam’s industrial development through 2025, with a vision toward 2035.

Review of Economic Perspectives

Národohospodárský obzor; The Journal of Masaryk University

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CiteScore 2017: 0.42

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