Does firm privatisation benefit local households? The case of Vietnam

Poverty reduction and migration in rural Vietnam: Role of local firm clusters

“…The associations between firm clusters and rural welfare and rural out-migration have attracted the attention of academics and policymakers in developing countries, including Vietnam, in recent years. Firm clusters can improve welfare of local community by increasing income and reducing poverty (Silva et al, 2022;Wardhana et al, 2017;Giang et al, 2015Giang et al, , 2016Fowler & Kleit, 2014). Some studies argue that rural firm clusters contribute to poverty reduction (Lund-Thomsen et al, 2016;Nadvi & Barrientos, 2004).…”

“…Our research makes several contributions to the existing literature and practice. First, while previous studies have examined the effects of firm clusters at the district or province level (Fowler & Kleit, 2014;Giang et al, 2015Giang et al, , 2016Giang et al, , 2017, our research explores the effects of firm clusters at the commune level, thus providing more detailed insights at a local level. Compared to previous studies, this research represents one of the early attempts to investigate the effects on outcomes at both the commune and household levels, aiming to provide a more comprehensive understanding.…”

Essays on Technical Change and Efficiency in a Transition Economy

“…Le et al (2014) also conclude that, in the long run, privatization will decrease the demand for low-skilled workers and increase the demand for high-skilled workers. However, this finding is inconsistent with Giang et al (2015) and Loc et al (2006), who find an increase in employment for the privatized firms. An explanation for these contrasting findings could be that this study is looking at an economy-wide general equilibrium to estimate an ex-ante effect of privatization, whereas other studies examine the micro data on firm performance to estimate the ex-post effect of privatization.…”

“…Although showing that there is an increasing trend of job creation in the private non-farm sector, Klump (2007) is not certain about the positive impact of privatization on poverty reduction without widening inequality. As a complement to Klump (2007), Giang et al (2015) find a positive effect of privatization since the early 1990s on household welfare and poverty reduction. Their empirical evidence, which is similar to Klump (2007), also shows that privatization doesn't lead to job losses and wage cuts for employees.…”

“…Our results are consistent with the more recent studies on privatization in Viet Nam. Le et al (2014) suggest that in the long run, privatization will lead to a skill mix towards medium and high-skilled workers, whereas Giang et al (2015) found evidence that the agglomeration of firms resulted from privatization increasing wages of individuals. Therefore, the policy implication of our study on privatization is still valid today, namely that the current skill situation of Viet Nam's labour force will be a 'bottle neck' for Viet Nam's economic growth in the near future.…”