[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-02481650.html
   My bibliography  Save this paper

Productivity and public expenditure : a structural estimation for Vietnam’s provinces

Author

Listed:
  • Phu Nguyen-Van

    (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

  • Thi Kim Cuong Pham

    (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

  • Duc-Anh Le

    (UNISTRA - Université de Strasbourg, BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

Abstract
We propose a structural approach to investigate total factor productivity (TFP) and economic growth of 58 provinces and municipalities of Vietnam (known as one of the most dynamic emerging economies in the last few years). The analysis is applied to the provincial data that are available to us for the period 2000–2007. TFP is composed of three components: an autonomous technological change, an observed deterministic part depending on external factors, and an unobserved stochastic part. Estimation results do not show any evidence regarding the impacts of national and local public spending on TFP and economic growth of Vietnam's provinces. On the contrary, human capital and industry share (compared to shares of agriculture and services) significantly increase the provincial TFP, helping to explain the cross-province differences in terms of productivity. Finally, TFP of Vietnam's provinces does not converge in the long run as it displays a polarization feature around two main groups of provinces, a large group with low TFP levels and a much smaller group with high TFP levels. This bipolar pattern of TFP distribution supports the competitiveness disparity among the Vietnam's provinces.

Suggested Citation

  • Phu Nguyen-Van & Thi Kim Cuong Pham & Duc-Anh Le, 2019. "Productivity and public expenditure : a structural estimation for Vietnam’s provinces," Post-Print hal-02481650, HAL.
    • Handle: RePEc:hal:journl:hal-02481650
    DOI: 10.1007/s41685-018-0085-1
    Note: View the original document on HAL open archive server: https://hal.univ-lorraine.fr/hal-02481650
    as

    Download full text from publisher

    File URL: https://hal.univ-lorraine.fr/hal-02481650/document
    Download Restriction: no
    File URL: https://libkey.io/10.1007/s41685-018-0085-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Iimi, Atsushi, 2005. "Decentralization and economic growth revisited: an empirical note," Journal of Urban Economics, Elsevier, vol. 57(3), pages 449-461, May.
    2. Robinson, Peter M, 1988. "Root- N-Consistent Semiparametric Regression," Econometrica, Econometric Society, vol. 56(4), pages 931-954, July.
    3. Li, Kui-Wai, 2009. "China's total factor productivity estimates by region, investment sources and ownership," Economic Systems, Elsevier, vol. 33(3), pages 213-230, September.
    4. Sugata Ghosh & Andros Gregoriou, 2008. "The composition of government spending and growth: is current or capital spending better?," Oxford Economic Papers, Oxford University Press, vol. 60(3), pages 484-516, July.
    5. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    6. Coe, David T. & Helpman, Elhanan & Hoffmaister, Alexander W., 2009. "International R&D spillovers and institutions," European Economic Review, Elsevier, vol. 53(7), pages 723-741, October.
    7. Alicia H. Munnell, 1990. "Why has productivity growth declined? Productivity and public investment," New England Economic Review, Federal Reserve Bank of Boston, issue Jan, pages 3-22.
    8. Guido Ascari & Valeria di Cosmo, 2005. "Determinants of total factor productivity in the italian Regions," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2005(2).
    9. Hansson, Par & Henrekson, Magnus, 1994. "A New Framework for Testing the Effect of Government Spending on Growth and Productivity," Public Choice, Springer, vol. 81(3-4), pages 381-401, December.
    10. Wallace E. Oates & Wallace E. Oates, 2004. "Fiscal Decentralization and Economic Development," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 21, pages 377-383, Edward Elgar Publishing.
    11. Enikolopov, Ruben & Zhuravskaya, Ekaterina, 2007. "Decentralization and political institutions," Journal of Public Economics, Elsevier, vol. 91(11-12), pages 2261-2290, December.
    12. Nguyen Khac Minh & Giang Thanh Long, 2008. "Factor productivity and efficiency of the Vietnamese economy in transition," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 15(1), pages 93-117, June.
    13. Ramirez, Miguel D., 1998. "Does public investment enhance labor productivity growth in Chile? A cointegration analysis," The North American Journal of Economics and Finance, Elsevier, vol. 9(1), pages 45-65.
    14. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    15. Madsen, Jakob B., 2007. "Technology spillover through trade and TFP convergence: 135 years of evidence for the OECD countries," Journal of International Economics, Elsevier, vol. 72(2), pages 464-480, July.
    16. Sergio Destefanis & Vania Sena, 2003. "Public Capital and Total Factor Productivity. New Evidence from the Italian Regions," CELPE Discussion Papers 73, CELPE - CEnter for Labor and Political Economics, University of Salerno, Italy.
    17. Devarajan, Shantayanan & Swaroop, Vinaya & Heng-fu, Zou, 1996. "The composition of public expenditure and economic growth," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 313-344, April.
    18. Davoodi, Hamid & Zou, Heng-fu, 1998. "Fiscal Decentralization and Economic Growth: A Cross-Country Study," Journal of Urban Economics, Elsevier, vol. 43(2), pages 244-257, March.
    19. del Barrio-Castro, Tomas & Lopez-Bazo, Enrique & Serrano-Domingo, Guadalupe, 2002. "New evidence on international R&D spillovers, human capital and productivity in the OECD," Economics Letters, Elsevier, vol. 77(1), pages 41-45, September.
    20. Zhang, Tao & Zou, Heng-fu, 1998. "Fiscal decentralization, public spending, and economic growth in China," Journal of Public Economics, Elsevier, vol. 67(2), pages 221-240, February.
    21. Gregoriou, Andros & Ghosh, Sugata, 2009. "On the heterogeneous impact of public capital and current spending on growth across nations," Economics Letters, Elsevier, vol. 105(1), pages 32-35, October.
    22. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    23. Baldacci, Emanuele & Clements, Benedict & Gupta, Sanjeev & Cui, Qiang, 2008. "Social Spending, Human Capital, and Growth in Developing Countries," World Development, Elsevier, vol. 36(8), pages 1317-1341, August.
    24. Li, Kui-Wai & Liu, Tung, 2011. "Economic and productivity growth decomposition: An application to post-reform China," Economic Modelling, Elsevier, vol. 28(1), pages 366-373.
    25. Whitney K. Newey & James L. Powell & Francis Vella, 1999. "Nonparametric Estimation of Triangular Simultaneous Equations Models," Econometrica, Econometric Society, vol. 67(3), pages 565-604, May.
    26. Oates, Wallace E., 1993. "Fiscal Decentralization and Economic Development," National Tax Journal, National Tax Association, vol. 46(2), pages 237-43, June.
    27. Engelbrecht, Hans-Jurgen, 1997. "International R&D spillovers, human capital and productivity in OECD economies: An empirical investigation," European Economic Review, Elsevier, vol. 41(8), pages 1479-1488, August.
    28. Lynde, Catherine & Richmond, J, 1993. "Public Capital and Total Factor Productivity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(2), pages 401-414, May.
    29. Miguel D. Ramirez, 1998. "Does Public Investment Enhance Productivity Growth in Mexico? A Cointegration Analysis," Eastern Economic Journal, Eastern Economic Association, vol. 24(1), pages 63-82, Winter.
    30. Daniel A. Ackerberg & Kevin Caves & Garth Frazer, 2015. "Identification Properties of Recent Production Function Estimators," Econometrica, Econometric Society, vol. 83, pages 2411-2451, November.
    31. Gary Woller & Kerk Phillips, 1998. "Fiscal decentralisation and IDC economic growth: An empirical investigation," Journal of Development Studies, Taylor & Francis Journals, vol. 34(4), pages 139-148.
    32. Johnson, Paul A., 2005. "A continuous state space approach to "Convergence by Parts"," Economics Letters, Elsevier, vol. 86(3), pages 317-321, March.
    33. Bronzini, Raffaello & Piselli, Paolo, 2009. "Determinants of long-run regional productivity with geographical spillovers: The role of R&D, human capital and public infrastructure," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 187-199, March.
    34. Sergio Destefanis & Vania Sena, 2005. "Public capital and total factor productivity: New evidence from the Italian regions, 1970-98," Regional Studies, Taylor & Francis Journals, vol. 39(5), pages 603-617.
    35. Ilke Van Beveren, 2012. "Total Factor Productivity Estimation: A Practical Review," Journal of Economic Surveys, Wiley Blackwell, vol. 26(1), pages 98-128, February.
    36. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    37. Nihal Bayraktar & Blanca Moreno-Dodson, 2015. "How Can Public Spending Help You Grow? An Empirical Analysis For Developing Countries," Bulletin of Economic Research, Wiley Blackwell, vol. 67(1), pages 30-64, January.
    38. Johnson, Paul A., 2000. "A nonparametric analysis of income convergence across the US states," Economics Letters, Elsevier, vol. 69(2), pages 219-223, November.
    39. Chen, Ku-Hsieh & Huang, Yi-Ju & Yang, Chih-Hai, 2009. "Analysis of regional productivity growth in China: A generalized metafrontier MPI approach," China Economic Review, Elsevier, vol. 20(4), pages 777-792, December.
    40. Niloy Bose & M. Emranul Haque & Denise R. Osborn, 2007. "Public Expenditure And Economic Growth: A Disaggregated Analysis For Developing Countries," Manchester School, University of Manchester, vol. 75(5), pages 533-556, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dechao Han, 2022. "Structural Reform, Technological Progress and Total Factor Productivity in Manufacturing," Sustainability, MDPI, vol. 15(1), pages 1-21, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Duc-Anh Le & Phu Nguyen-Van & Thi Kim Cuong Pham, 2016. "Public expenditure, growth and productivity of Vietnam’s provinces," Working Papers of BETA 2016-17, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    2. Sarantis Kalyvitis & Eugenia Vella, 2011. "Public Capital Maintenance, Decentralization, and US Productivity Growth," Public Finance Review, , vol. 39(6), pages 784-809, November.
    3. Martinez-Vazquez, Jorge & McNab, Robert M., 2003. "Fiscal Decentralization and Economic Growth," World Development, Elsevier, vol. 31(9), pages 1597-1616, September.
    4. Whitney Buser, 2011. "The impact of fiscal decentralization on economics performance in high-income OECD nations: an institutional approach," Public Choice, Springer, vol. 149(1), pages 31-48, October.
    5. Umaima Arif & Eatzaz Ahmad, 2018. "A Framework For Analyzing The Impact Of Fiscal Decentralization On Macroeconomic Performance, Governance And Economic Growth," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 65(01), pages 3-39, May.
    6. Thushyanthan Baskaran & Lars P. Feld & Jan Schnellenbach, 2014. "Fiscal Federalism, Decentralization and Economic Growth: Survey and Meta-Analysis," CESifo Working Paper Series 4985, CESifo.
    7. Margit Schratzenstaller-Altzinger, 2006. "Teilstudie 12: Wachstumsimpulse durch die öffentliche Hand," WIFO Studies, WIFO, number 27451.
    8. Ramiro Gil-Serrate & Julio López-Laborda, "undated". "Modelling Tax Decentralisation And Regional Growth," Working Papers 14-05 Classification-JEL , Instituto de Estudios Fiscales.
    9. Muhammad Shahid & Rukhsana Kalim, 2020. "Decentralized Tax Revenue, Institutional Complementarity and Economic Growth: A Time Series Analysis of Pakistan," International Journal of Economics and Financial Issues, Econjournals, vol. 10(4), pages 25-33.
    10. Andrés Rodríguez-Pose & Roberto Ezcurra, 2011. "Is fiscal decentralization harmful for economic growth? Evidence from the OECD countries," Journal of Economic Geography, Oxford University Press, vol. 11(4), pages 619-643, July.
    11. Lessmann, Christian & Markwardt, Gunther, 2012. "Aid, Growth and Devolution," World Development, Elsevier, vol. 40(9), pages 1723-1749.
    12. Cong Minh Huynh & Hoai Nam Tran, 2021. "Moderating effects of corruption and informality on the fiscal decentralization—economic growth nexus: Insights from OECD countries," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 92(2), pages 355-373, June.
    13. Divino, Jose Angelo & Maciel, Daniel T.G.N. & Sosa, Wilfredo, 2020. "Government size, composition of public spending and economic growth in Brazil," Economic Modelling, Elsevier, vol. 91(C), pages 155-166.
    14. Giuseppe Di Liddo & Cosimo Magazzino & Francesco Porcelli, 2015. "Decentralization, Growth And Optimal Government Size In The Italian Regional Framework," Working Papers 0115, CREI Università degli Studi Roma Tre, revised 2015.
    15. Sanz Labrador, Ismael & Sanz-Sanz, José Félix, 2013. "Política fiscal y crecimiento económico: consideraciones microeconómicas y relaciones macroeconómicas," Macroeconomía del Desarrollo 5367, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    16. Brueckner, Jan K., 2006. "Fiscal federalism and economic growth," Journal of Public Economics, Elsevier, vol. 90(10-11), pages 2107-2120, November.
    17. Pierre Salmon, 2013. "Decentralization and growth: what if the cross-jurisdiction approach had met a dead end?," Constitutional Political Economy, Springer, vol. 24(2), pages 87-107, June.
    18. Poot, Jacques, 1999. "A meta-analytic study of the role of government in long-run economic growth," ERSA conference papers ersa99pa171, European Regional Science Association.
    19. Zhang, Tao & Zou, Heng-fu, 2001. "The growth impact of intersectoral and intergovernmental allocation of public expenditure: With applications to China and India," China Economic Review, Elsevier, vol. 12(1), pages 58-81.
    20. Sanja Borkovic & Peter Tabak, 2018. "Public investment and corporate productivity in Croatia," Public Sector Economics, Institute of Public Finance, vol. 42(2), pages 171-186.

    More about this item

    Keywords

    Vietnam’s provinces; Total factor productivity; Sectoral shares; Human capital; Local public expenditure; National public expenditure;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-02481650. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.