Exploring the Sustainability of Resource Flow and Productivity Transition in Vietnam from 1978 to 2017: MFA and DEA-Based Malmquist Productivity Index Approach

Abstract

Resource efficiency is a primary policy goal in many developing countries that are resources suppliers. This study performed a first try to explore the resource productivity and efficiency of an emerging world factory, Vietnam, by applying an improved economy-wide material flow analysis (MFA) integrated with a data envelopment analysis (DEA)-based Malmquist productivity index approach (MDEA). Resource flows from 1978 to 2017, and the corresponding utilization efficiency considering the unexpected environmental outputs, as well as productivity were explored in depth. The results highlighted a positive correlation between rapid growth among domestic material consumption (DMC), GDP per capita, and material intensity (DMC/capita) in Vietnam during the last four decades. Meanwhile, the resource productivity (USD/DMC) increased from 82.4 USD/ton to 125 USD/ton (2017), presenting a much slower pace than that of Japan and China. The IPAT-based decomposition analysis highlighted the contribution of rising affluence (94%) and population (21%) to the rapid growing DMC, while the technology factor (DMC/GDP) needed to be further enhanced. Finally, the total factor productivity, when comparing between Vietnam, China, South Korea, and Japan, showed that, on the one hand, the Vietnamese economy has strongly been changed in a positive direction with EFFCH 1.061 and TECHCH 1.046 during the last four decades. One the other hand, Vietnam is still material intensive and has low material productivity. Our analytical results recommend Vietnam to strengthen technology innovation and aim for efficiency enhancement through closely coordinated policies on sustainable resource consumption, carbon reduction, and economic growth, in line with the United Nations Sustainable Development Goals for 2030 (SDGs 2030).