Ownership, trade, and productivity in Vietnam’s manufacturing firms

This paper examines the interrelations among ownership, trade, and firm productivity in Vietnam, a developing transition economy. Based on a firm-level panel data for the period 2000–2008, the empirical results show that foreign-owned enterprises (FOEs) experience higher productivity than do their domestic counterparts, whereas private firms (POEs) are not expected to outperform state-owned enterprises (SOEs) in productivity. Trade executes a productivity-enhancing effect for Vietnamese firms, but this effect only applies for FOEs and POEs, and not for SOEs. Vietnam access to the WTO produces tough competition and improves SOEs’ productivity. Various robustness checks support our findings.