APL (Ajiken Power Lunch)

APL (Ajiken Power Lunch) is a lunchtime workshop open to public, including IDE staffs, visiting research fellows, IDEAS students, outside researchers and graduate students. This workshop provides a platform for presentation of any work in progress where we can discuss in either English or Japanese.

Those who would attend a seminar are asked to announce yourself to receptionists on your arrival at the IDE and to obtain APL Organizers' signature on your admission card after the seminar.

April 15, 2015. (Wednesday) 12：30-14：30

Institute of Developing Economies, Japan External Trade Organization C23 Meeting Room 　

Misallocation, Productivity, and Trade Liberalization: The Case of Vietnamese Manufacturing (with Doan Thi Thanh Ha)

This paper attempts to measure the contribution of resource　misallocation to aggregate manufacturing TFP, focusing on Vietnamese manufacturing firms for the period 2000-09. Our research questions are threefold. 1) To what extent are resources misallocated in Vietnam? 2) How large would the productivity gains have been in the absence of distortions? 3) Did the degree of misallocation decline after entry into the World Trade Organization (WTO)? The answers to these questions are as follows. First, misallocation in Vietnam is comparable to that in China and India. Second, there would have been substantial improvement in aggregate TFP in the absence of distortions. Finally, misallocation did not necessarily decline after the accession to the WTO. However, this final result does not necessarily mean that there are no gains from trade liberalization. Although trade liberalization contributed to reducing the distortions in output markets, it was offset by increasing distortions in capital markets, which are possibly attributable to the global nancial crisis. These results together suggest that trade liberalization is not a panacea. Further reforms in capital markets could improve aggregate TFP in Vietnam through reduced misallocation.

Prof. Kozo Kiyota (Keio Economic Observatory, Keio University)

Tadashi ITO

Japanese