Premature deindustrialization risk in Vietnam

Abstract

PurposeThis study aims to examine the premature deindustrialization risk in Vietnam.Design/methodology/approachThis study uses a manufacturing–income relationship to conduct an empirical estimation. The latecomer index is adopted in the regression model to identify a downward shift of latecomer's relationship.FindingsThe empirical analysis indicates that there is a risk of premature deindustrialization in the Northern Midlands and Mountain Areas. The provinces with low trade openness or foreign direct investment may experience risk of premature deindustrialization.Practical implicationsThis study proposes technology diffusion as a policy direction to prevent premature deindustrialization. Furthermore, the Vietnamese government should improve the business environment in the Northern Midlands and Mountain Areas by promoting and attracting export-oriented foreign direct investment.Originality/valueThis study is the first to examine premature deindustrialization in Vietnam based on provincial-level data.