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Productivity analysis for Vietnam's textile and garment industry

This paper uses firm-level panel data to study the development and determinants of technical efficiency and productivity in the textile and garment sector in Vietnam during the period 1997-2000. | PRODUCTIVITY ANALYSIS FOR VIETNAM S TEXTILE AND GARMENT INDUSTRY Nguyen Thang To Trung Thanh Vu Hoang Dat Remco H. Oostendorp ABSTRACT This paper uses firm-level panel data to study the development and determinants of technical efficiency and productivity in the textile and garment sector in Vietnam during the period 1997-2000. Applying the methodology of Battese and Coelli 1995 we find that average technical efficiency of the textile and garment sectors is relatively high but that technical efficiency differs significantly across ownership location size age and export orientation. The most productive firms in the textile sector are old mid-sized private South-based export-oriented firms while in the garment sector old medium to large private or foreign invested South-based firms have the highest technical efficiency. In the garment sector TFP has increased over the study period reflecting changes in technical efficiency as well as technical progress. 1 Acknowledgements This paper was written based on a competitiveness study funded by the International Development Research Center of Canada as part of the Vietnam Economic Research Network. We like to thank Bernard Decaluwé and John Cockburn for their valuable assistance in the course of the study and we are also grateful to the seminar participants at the Hue Halong Bay and Hanoi workshops for their helpful discussions and comments on earlier versions of the paper. Any remaining errors remain our own.