Export Persistence and Productivity in Vietnam: Who Learns?

Abstract

The purpose of this study is to investigate the causal relationship between firms' export activities and their productivity, with a specific focus on identifying the source of productivity improvement by examining the persistence of export operations. Leveraging firm-level panel data from 2010 to 2015 in Vietnam, we employed a combination of Propensity Score Matching and Staggered Difference-in-Differences. Our findings indicate that the phenomenon of learning by exporting is evident across both consistent and intermittent exporters. For manufacturing enterprises, our analysis reveals no substantial variance in the learning by exporting effect between the steady and sporadic exporters. In contrast, within the service sector, we discern that intermittent exporters experience a more pronounced enhancement in labor productivity compared to their consistent exporting counterparts. Upon delving deeper into industry analysis, it becomes evident that the manufacturing and wholesale/retail trade sectors are the ones benefiting most from export activities. An interesting observation is that, within the manufacturing sector, we only find a positive impact on labor productivity with continuously exporting firms. This disparity implies that the mechanisms through which the learning-by-exporting effect operates may diverge between the manufacturing and service sectors. Furthermore, our empirical evidence reveals a direct positive correlation between export status and firm performance within privately owned enterprises. However, such a relationship was not evident for state-owned enterprises. To capitalize on the potential of export-driven growth, policymakers should adopt a nuanced approach, tailored to the unique dynamics of different industries and ownership structures. This underscores the importance of sector-specific support mechanisms, capacity-building initiatives for state-owned enterprises, and targeted export literacy programs for enterprises in fostering a conducive environment for sustainable economic growth in the Vietnamese context.