Original scientific paper
https://doi.org/10.1080/1331677X.2023.2263532
The impact of productivity on export transitions: revisited evidence from the Vietnamese manufacturing sectors
Thanh Quang Ngo
Canh Thi Nguyen
Trung-Thanh Nguyen
Khoa Dang Duong
Sang Van Nguyen
Thanh Xuan Bui
Ky Nguyen Tran
Abstract
The effect of total factor productivity (TFP) on exports particularly
interests policy-makers and economists, but empirical evidence is
ambiguous. This paper uses the 6-wave panel data in 2010-2015
to investigate the impact of TFP on export transitions at the firm
level. We distinguish different types of export transitions, namely
start, stop, continuity, fluctuation, and striving, and different
phases of export transition. The Generalised Method of Moments
(GMM) estimation is applied to control for endogeneity and unobserved
time-invariant specific components. The results reveal that
(i) the effect of productivity on export (the self-selection hypothesis)
is heterogeneous, depending on specific sectors and types
and phases of export transitions; (ii) productivity growth does not
necessarily result in positive effects on and lead to participation
in types and phases of export transitions. Our results also reveal
strong evidence of favourable sunk cost in long-run export striving
in nearly all sectors, and unlike previous studies, empirical
results show a negative effect of sunk cost in some manufacturing
sectors. Policy-makers should create dynamic comparative
advantages and favourable environments for new exporters, focus
the relevant policies on productivity stimulus, and strengthen the
likelihood of survival for the domestic firms in the competitive
global markets.
Keywords
Self-selection; export transition; total factor productivity; heterogeneous firms; manufacturing sectors; Vietnam
Hrčak ID:
315153
URI
Publication date:
8.10.2023.
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